The Diary of Your Money!

by Dean

Is Your Credit Healthy?

Your credit history is something that should be viewed as one of the more important aspects of your life. When you visit your doctor for a physical examination, you will be advised of things you need to do in order to stay healthy. When you choose not to follow the doctor’s orders, you run the risk of developing a host of illnesses such as hypertension, heart disease, diabetes or high cholesterol just to name a few.

The same can be said of your credit. Being negligent with your credit by failing to pay bills on time or by constantly exceeding your limit will result in an upsetting diagnosis and cause your credit history to become unhealthy. An unhealthy credit history may cause you to be denied for a loan or apartment, to receive higher interest rates, or to receive a rejection letter for the "dream job" you’ve always wanted.

But what if your credit is unhealthy? What should you do to get back on track? If you’ve become a victim of identity theft, or even if you have tarnished your credit from mistakes made in the past, here are some strategies that can help make your credit history well again:

Bouncing Back from Mistakes
The best way to repair credit that you’re responsible for is to pay your bills on time and pay off your debt. But, getting out of debt is oftentimes a difficult and lengthy process that requires you to practice discipline and perseverance. Consider these tips to make the most of your efforts:

1. If you have several credit card balances, pay off the card with the highest interest rate first. This process is called laddering, and it will save you a bundle of cash in interest.
2. Pay at least the minimum payment on your cards with lower interest rates. Eventually you’ll be able to cut up the card with the highest interest rate and move on to the next card.
3. You can get more for your money and reach your goal more quickly if you make a separate payment every 14 days to the credit card company instead of one monthly payment. Mark your calendar every 14 days and send a payment on that day. Making a payment every 14 days means you will make 13 payments in a year instead of just 12. Work these payments around your statement cycle to avoid paying late fees.
4. Consider paying off a high-interest loan all at once. Allocate your tax refund or other cash towards the loan. It may make sense to dip into your savings, since the interest you’re paying on your credit card is higher than what you’re earning on your savings account. If you choose this route, be committed to rebuilding your savings as quickly as possible.
5. Consider a low-interest personal loan to consolidate your bills into one payment and save you money on interest. Use the money you’re saving in interest to pay down the loan principal.
6. If you are sure of your ability to pay down your debt without adding new debt, a home equity loan may be another option. Interest on the first $100,000 borrowed is usually tax deductible; however, if the money you borrow with this loan becomes a long-term debt, you’ll wind up paying more in the end.

If you feel you are in over your head, seek credit counseling. Although paying off debts through an agent does not look good on your credit report, it is far less damaging than bankruptcy. Try the National Foundation of Credit Counseling at www.nfcc.org.

Also, creditors consider your current conduct as a much better indicator of your creditworthiness than how you behaved in the past. You can significantly improve your credit within two years if you remain diligent and manage your credit responsibly.

Prevention for the Future
Paying off what you owe isn’t always a long-term solution. If you want to make certain that you avoid going into debt again, you must reverse the habits which got you into trouble in the first place.

Follow these pointers to help manage and maintain your credit:

• Know the terms and conditions of each credit card before signing up. If you find any of the language unclear, ask questions.
• Avoid going into debt for items you don’t really need. As a practical point to consider, bills for items purchased on credit should not exceed 10% - 20% of your monthly take-home pay.
• Try limiting yourself to owning only one credit card.
• Pay off credit card balances in full each month. If you only pay the minimum balance due (2.5% of the unpaid balance or $10, whichever is greater) on a $1,000 balance with an interest rate of 13%, it will take you almost 10 years to pay off the balance. This is also with the assumption that you make no more charges on the credit card during those 10 years.
• Combine your use of credit with a savings plan, meaning after you pay off a loan or credit card, redirect that same monthly payment to your savings account.

Cancer

by Cecil F Bennett, MD

How much would you pay for a cure if you had lung cancer? How much would you pay if your child needed a transplant? Would you exhaust your savings? Would you sell your house? Would you ask everyone you knew for money? If it meant living right above the poverty line, but you were cured or your child got the transplant, would it have been worth it to lose everything?

We spend so much time protecting our possessions. We spend so much time squirreling away our nuts to prepare for retirement. What does any of it matter if you or your child dies in six months? I, like you, don't even like to think about those things. When the republican white house press secretary, Tony Snow, announced his cancer had returned a week after the wife of the democratic presidential candidate John Edwards announced her cancer had returned, who cared about their politics, except Rush Limbaugh?

When cancer hits a family, it is like throwing a brick through their window of life. I was so sorry to hear about the passing of Mr. Snow. He always conducted himself in a professional and truthful manner when I saw his press briefings. I remember the sudden passing of David Bloom years ago while covering the gulf war from what appears to have been a blood clot. Weeks ago Tim Russert passed away after a sudden heart attack. From the outside looking in, I believe they were all were individuals dedicated to their family and their careers. Illness changes everything.

Illness and death has does not favor republican over democrat or vice versa. We are all Americans and have to fight together for the sake of all our families. No one today in America should die of colon cancer, breast cancer, prostate cancer, cervical cancer or ovarian cancer. We are spending a lot of time and money looking for cures we already have for most cancers. The cure is prevention.