Well, you woke up today and after drinking your coffee you realized you're in a heap of debt. How did you get there you wonder? Millions of Americans are finding themselves more and more in debt. The average balance per family household is now just over $9000. Some are considerably higher. Having a significantly high amount of credit card debt doesn't necessarily result from going on lots of shopping sprees. It usually occurs from a life changing situation such as a medical problem, loss of a spouse, or loss of job. The latter happened to me.
So how do you get out of this?
The first thing to do is to take control of your money. Develop a spending plan. What's a spending plan? It's essentially a budget. I don't like to call it a budget because the term budget seems to be very stringent and doesn't lend itself to flexibility. I heard a pastor once say that him and his wife decided to write down for one month exactly what they were spending their money on. Each one carried a small 59 cent notepad and wrote down every time they spent money on something. Their result? They came to the conclusion asking themselves, "We spent money on what?!"
Make life changes.
This usually results from the first step - developing a spending plan. You begin to see areas that you may have been spending frivolously or areas that you know you can cut back in or just plain eliminate. If you are in a large amount of debt, you may need to consider the eliminate things route. The only thing that I can eliminate is my spending money for lunch at work. I did eliminate this and started to pack my lunch. I heard one debt counselor say, "If people start to tease you about the way you're doing things like, 'packing again?', then you're doing the right thing." It does make a difference. I actually see money in my pocket now. So what's another debt management solution?
Pay more than the minimum on your credit card balances and pay the smallest one first.
This is probably the most important debt management solution next to developing a spending plan. First, people always say pay more than the minimum. This is important. By paying more than the minimum, you can drastically reduce in some cases the amount of interest that you are paying to a credit card and the amount of actual time you'll be paying on it. Also, another significant thing to do and which is probably the most significant is to pay your smallest credit card first and then apply the that payment to your next highest credit card and then so on and so on. This is called the snowball effect. Many people argue that it's better to pay off the highest interest rate card first. While this may make sense when you think about it initially, it actually works out that by paying the smaller one first will give you an extra punch while moving up to the bigger balance credit cards. I'm going to be developing a program on my site here sometime in the future that will let you pick which method you want to take and let it calculate how long it would take to pay off your debt using each method.
There you have it! Three sure-fire ways to get you on your road to financial freedom!
Richard Stranberg is just starting to come out of his sea of debt after being professionally unemployed now for over 5 years. Join him in his journey as he discovers new and life-changing principals to achieve financial freedom at http://www.debtsolutionsmanagement.com
Caregiving's Costly Burden
Hey - If I had known that official government policy toward caring for elderly parents was that their children would have to do it all, well I would have had 10 kids.
While it's said that those in the developing world have numerous children with the hope that some will survive to care for them when they're old, those in developed counties have about two children.
Somehow I guess I thought our so-called developed world had some type of policies for elderly caregiving, but the United States simply doesn't. While Medicare will take care of hospitalization for a heart attack, those who need chronic care for Parkinson's disease, diabetes, Alzheimer's disease or heart failure just have to depend on family, pure and simple. After that, long term care insurance coverage is the only answer.
Boomers can purchase long term care insurance for their own future care, but this doesn't help the greatest generation that needs care now. With no program to address chronic care, Medicaid, a welfare program for the proven poor, has become the default option for much long term care - nursing homes. So if a person has the $90,000 needed in New York state, he or she can enter a nursing home. But that money will be gone within two years, and Medicaid will then pick up the nursing home expenses. About 2/3 of Medicaid goes to pay nursing home care for those who have outlasted their money. But remember, over 40% of nursing home residents are under age 65.
"Nursing homes are the last resort - where a disabled person will go when a family caregiver can no longer care for the relative at home," said a doctor.
Studies show that a decision to place somebody in a nursing home comes not when the person reaches some type of medical criteria; it's when a caregiver can no longer give the care because of health or financial reasons.
And while most don't have the money to place a relative in a nursing home, many of the 80 percent of U.S. caregivers don't even want to go the nursing home route. Despite being regulated by government, nursing homes, with a very few exceptions, aren't places most people want to go.
Family caregivers adding home care for the disabled to their many other responsibilities, suffer physically and mentally. A nes report, "Study of Caregivers in Decline: A Close-up Look at the Health Risks of Caring for a Loved One", details how the stress and worry about caregiving results in millions of caregivers neglecting their own physical and mental health, resulting in depression, fatigue, poor eating and exercise habits and greater use of alcohol, drugs and medications.
When these caregivers' responsibilities and concerns are taken in the context of the responsibilities they also have for their own lives - including work and family - many caregivers are overwhelmed, and the stress can take the physical form of heart-attack scares, high blood pressure, acid reflux, headaches, arthritis flare-ups and other conditions, the report said.
I've articulated the caregivers' predicament to 100s of policymakers and lawmakers, and for the most part, this problem is just not on their radar screen. There are a few expeditions, and ther are a few programs such as the National Family Caregiver Support Program, but an overall strategy of supporting caregivers, who supply more than $257 billion in care each year, simply does not exist. The answer that I keep getting is this: "it's a societal problem."
Meanwhile, where does a caregiver turn? Some of the forty six percent of caregivers who are now employed can turn to professional caregiving assistance via his or her employer, and some employers provide free, but limited, geriatric case managers to assist employees in negotiating thi path of family caregiving, but it can be costly.
For example, the home assessment costs $580, and a case manager earns an hourly rate of $125/hour.
In California, Caregiver Resource Centers provide some services free or at low cost, including social workers to assess the caregiving situation for current and future needs.
Those with access to a free home assessment should take advantage of it, especially before a health crisis occurs, and folks without long term care insurance coverage can get personal advice and free comparative rate quotes online.
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Long term care insurance activist, Clay Cotton, writes for http://www.PrepSmart.com - The Online Baby Boomers Decision Assistance Center, where you get Free Long Term Care Insurance advice, comparative rate quotes and personal guidance, all while safely at home in your favorite pajamas and bunny slippers.
How Many Credit Cards do you Need?
