Pay Attention to Interest Charges on Your Monthly Bills
A prominent Cincinnati criminal defense lawyer was recently giving a lecture to a group of college students. As he finished his prepared speech, he opened up the discussion to questions from the group and he was surprised at the level of response he received. One of the students who seemed really interested in becoming an attorney himself was particularly curious about helping low income clients and he had many questions that pertained to how to go about preparing for that. The attorney pointed out that one way of helping people is to give them the knowledge to better take care of themselves especially when they are drowning in unpaid bills. He referenced a Cincinnati debt relief service that he had recently worked with who was doing great work among the citizens who needed help with paying their credit bills. This company actually gave people the information needed to contact credit card companies to arrange for smaller payments and longer times to pay off their bills.
Many people are surprised that it is even possible to negotiate with a credit card company but not only is it possible, it is done every day. The new credit card rules that just become law make it easier to know exactly how much interest is owed to the company and how long it will take to pay off the bill. There is even a line on there that tells how long it will take to pay off the bill if the minimum payment only is made each month. This is quite an eye-opener to many people who just blindly pay the minimum payment each month without regard to how little is going on the actual amount owed.
It is also wise to check out how much interest is being paid on your mortgage payment each month. Sometimes this is a huge incentive to pay a little extra on your principal whenever you have any extra money in order to reduce the amount of interest paid over the long term on your mortgage. Some will argue that you should not worry about paying interest on your mortgage because it is tax deductible but why not use that money for something tangible that you can enjoy?
There is a theory that people tend to buy more things and spend more money when using a credit card rather than paying cash. While having a credit card is almost a necessity in this world today it is sometimes a good exercise to put that card away (some advisors will tell you to put it in water and freeze it so it is not readily available to use) and use the old fashioned “envelope system” for a period of time. When the money in the “eating out” envelope is gone there is no more eating out until payday makes it possible to replenish the money. When “grocery money” is gone, make meals with what is already in the pantry, and so on. Although this is not a practical way to live for very long it is a good exercise to find out exactly where the money is going and it also encourages some creativity in stretching that dollar.