Struggling under a mountain of debt is no fun, but it is a way of life for many who do not keep their personal finances in balance. Some people ignore warning signs that they really need to regain control of their finances until it is too late. Here are some quick ways to tell if you are in danger of being buried by debt, along with some tips on how to take charge of your money problems.

Have you ever taken a cash advance on one credit card in order to make the minimum monthly payment on another card? This means that your debt load is way too high, and you need to find a way to bring it down fast and restore order to your personal finances. Do whatever is required, whether it is taking a part time job or just limiting spending to bare essentials until your financial picture improves. Commit to paying off the cards with the highest interest rates first, if possible, and the ones with the lowest balances if it is not. Set a specific time limit, such as six months, to reach your goal, and follow through on your commitment to control your finances. And do not add any new charges unless it is literally a matter of life and death.

Have you ever taken a cash advance on a credit card to make a bank deposit so that a check won’t bounce? This is similar to using one card to pay another, only worse. This means your finances are so out of control that it is critical you find a solution. Perhaps you have not been reconciling your checking account regularly. If not, start immediately. If returned checks are a problem, start using cash to pay for living expenses until you can regain control over your personal finances. Make all of your regular payments, and then take whatever is left in cash. Divide it up according to how long it has to last and place it in envelopes which are labeled with the purpose, such as lunches or groceries. Pay for purchases out of the appropriate envelope. Some people like this method so well that they continue to use it long after they have resolved any issues with their personal finances.

Do you have to check the available balance on your credit card before you can go to the grocery store? Using credit cards for living expenses is fine for your personal finances if you want the convenience and can pay off the balance each month. However, many people who are struggling with their personal finances frequently charge things like groceries and gasoline, and then make only the minimum payments. This is one of the worst mistakes you can make when it comes to your personal finances. You are increasing your debt load for items that are long gone before you even receive your statement, much less pay the bill.

Is it a struggle to just pay the minimum amounts due on your credit cards each month? This is creating a personal finance scenario where you will probably never be out of debt. Stop using your cards until you have reduced your balances and regained control over your personal finances, or find a way to earn extra income and dedicate those earnings to paying off your debt more quickly.

Some of you may have found the personal finance scenarios described humorous. Sadly, these are actually circumstances that happen more often than many want to admit. As a nation, we have never been more deeply in debt nor maintained so little control of our personal finances. But the good news is that you can remedy your situation with your personal finances and debt. It won’t happen overnight, but if you are willing to work at it, you can regain control over your personal finances and eliminate your burden of debt.

By: Jason Rodriguez

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Kansieo.com

Independent Financial Advisers are professionals who offer unbiased advice on financial matters to their clients and recommend suitable financial investments.

It is a financial advisors obligation to look at a client’s entire portfolio. Per “know your customer” rule, advisors should take the time to understand the client’s existing portfolio as well as risk tolerance, time horizons and financial goals and objectives. In a pure, Modern-Portfolio Theory sense, it is accepted that diversification and asset allocation have been proven to increase long-term rewards and reduce short-term risk. Additionally, clients who achieve their goals with limited or manageable risk are happier clients. Therefore, it is important for financial advisors and investors to think outside their routine “box” of investments and be aware of ALL the ways to offer their clients true diversification.

Advisors should recognize that true diversification extends beyond a portfolio that holds even a carefully balanced array of market-traded assets. There are a wide variety of “alternative” investments that include things like mortgage deeds or notes, real property, liens and foreclosures, hard-money lending private equity investments, start ups, to name a few*

Typically, the vast majority of institutions offering IRA services do not allow for their clients to invest in alternative investments, and therefore do not promote the fact that clients can choose from a wide variety of investments options outside of traditional markets for their Retirement Account. Be aware of the large brokerage firms that claim to offer clients “self directed” IRAs. These accounts are typically only self-directed in the sense that clients make the investment decisions and choices independently (e.g. without the advice or discretion by the provider). In these institutions they restrict the “type” of investments to publicly traded investments.
Prudent advisors and investors should be aware of the opportunities outside of market-traded assets, opportunities that are available within a self-directed retirement account (SDRA). These assets typically have no or low correlation to the financial markets. This means that they can provide more diversification in a portfolio while giving the client more investment options overall. Many investors have a better understanding of alternative investments and, therefore, may feel more secure in “investing in what they know”.

To better serve clients needs and put client’s best interest first, if an advisor doesn’t actively offer their clients the opportunity to invest in alternative investments, they should at least be aware of other investment options and ideally be able to refer the client to someone who does.

*Some restrictions apply. It is important to consult with a professional regarding
IRC Pub 590 regarding regulations before investing.

**Securities offered through USWA, LLC, Member SIPC, and advisory services through USFA, LLC, a registered investment advisor.

By: Laurie Bachelder

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