Credit cards and more put people in the red--how to get in the black
'Erasing the red ink'--advice from our financial advisors on getting out of debt.
On Monday, February 20, our Financial 411 call-in was on erasing debt.
Our panel of Certified Financial Planners includes:
Grace Ghezzi, Benefit Consulting Group, 474-1707 x460
Ted Sarenski, Blue Ocean Strategic Capital, 471-2672
Dennis Hebert, Strategic Wealth Advisors, 234-7526
~Do you know what your credit score is? You can find out how you're doing at www.annualcreditreport.com
There are three different credit reporting agencies, and if you check with a different one every four months, you'll get a feel of how you're doing, year-round, for free.
~Is bankruptcy the solution? There is no such thing as wiping the slate clean. Here are some areas that bankruptcy won't touch:
> taxes owed
>spouse or tax support
>federal school loans
>personal injury
>debts owed to retirement plans
>debts incurred by fraud
>liens on mortgages
If you're considering bankruptcy, don't do it alone! Consult a bankruptcy attorney.
~How do you get started, erasing the red ink?
There's a 'system', especially with credit card debt:
Pay off the card with the highest interest rate first, unless you have one that's fairly small (one caller had a $1,000, for example) and then, use the money for the low-card payoff to apply to the one with the highest interest. Keep using the 'payoff' amount until that card is done, then start on the next-highest.
~Savings versus spending. With the economy up, spending is also going up, and savings is going down. It's bad news because you can get into debt more easily if you're spending, and by not saving for long-term you could hurt your retirement years.
~Mortgages. Your house is usually your biggest asset, and you can look into a home equity loan, to use to pay off credit card debt, then pay off the amount owed at the lower interest on the loan. If you're over 62 you can also look into a reverse mortgage to tap into the value of your home.
>>Next week (February 27th) our topic will be retirement planning.
You can email questions at money@cnycentral.com or call 477-9480 5 - 6:30 on Monday evenings
