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92 votes. |
A recent Quicken (http://www.quicken.com) survey shows that only three in 10 families have saved enough of a nest egg to last for 90 days or longer. One in four Americans live paycheck-to-paycheck. I likes to compare this economic period as being in a baseball game. I suggest that we go for a single and not the elusive homerun. That means that we rebuild our savings step-by-step. If you save nothing from your paycheck now, start. If you already save weekly, step it up a notch. If you have debt, stop borrowing and work to pay back that loan. Reduce your debt with dedication and watch your daily spending for a full two-week period. Jot down in a small notebook every single purchase made (get a notebook for your spouse too!). Then, sit down and "grade" every purchase. I say to ourselves to give an "F" grade to that $1.50 cup of coffee. Start to eliminate purchases not absolutely necessary. A recent Wall Street Journal's Money & Investing report included the concerns of nationwide bank examiners worried about the numerous types of home equity loans being pitched to debt-ridden consumers. Pitches for home equity loans that are "tax deductible" and to rid consumers of credit card debt come in all forms. Half of the banks surveyed by a federal agency offer these stupid types of loans. When consumers cannot pay the loan back at interest rates leveled at 13%-14%, they are in danger of losing their biggest asset - their home. More than $25 billion dollars had been loaned to consumers from 1996 through 2000. Already this year $5 billion has been borrowed on home equity-type loans. Are you having difficulty paying your bills? Don't respond to these pitches to easily get out of debt, or credit card debt. You're just rearranging one debt for another. The only "green light" to take out one of these loans is to make improvements to your home. Period. |