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Hi Scott:
First, thank you so much for what you do--it
has already helped tremendously in the situation I'm writing about. I first
found your name and website from Consumer Reports, which is why I trusted you
from the outset--they're one of the few consumer sources I trust to steer me
well.
My best friend (yes, really, a friend, not me)
is having severe credit card debt problems after a period where he had to use
the cards after being laid off and having difficulty finding work and also
unexpected medical bills that accumulated during his time off work. He has a
balance hovering around $33,000.00. Using your suggestions I have helped him get
reduced (temporary) finance charge percentages and have transferred some of the
debt to lower interest cards (by calling his credit card companies and applying
for zero percent cards), so his payments are paying down the debt better than
they were. He's paying MUCH less in finance charges at this point (thanks to
you!).
The problem is, while he is currently able to
make the monthly payments (and, ironically, he has a spectacularly positive
payment record--he has NO late payment history at all) he is BARELY able to do
so--his new job pays just enough for rent, food, basic supplies, and his credit
card payments (he lives and works in an urban area and does not have/need a
car), but the fact that he has no margin for saving money or paying down the
balances (beyond the minimum payments) is setting him up for even more problems
down the road.
Should he seek credit counseling or debt
reduction? He doesn't really qualify, from what I've read at your site, for debt
reduction because he's not delinquent with his payments at this point.
The pressure from all this is really dragging
him down, and he keeps plugging away at his new job (he's been there almost a
year now, and he's well-loved there) but really does feel as though he's just
treading water, not really advancing. Plus he literally has no "spending money"
beyond the basics, which also wears on him.
Any suggestions you can offer would be GREATLY
appreciated by me as well, as it's tough to watch a good friend (or anyone, for
that matter) go through this.
He has very solid values and wants to do the
right thing and pay this off, but he fears he never will be able to (he's 46, by
the way).
Thanks Scott,
John G.
John,
You're welcome. Glad to hear that DebtSmart.com
is helping.
It's great that you're helping your friend with
his finances. I always tried to help my friends if they asked, and that's how I
got started writing about credit cards and debt management.
Moving all his debt to zero percent is the best
place to start. That's the most efficient action to take because you save the
maximum amount of cash in the least time by negotiating with banks. And if that
doesn't work, then transferring to new cards with low rates is next. (My
recommended card list is at
http://www.debtsmart.com/cards/.)
I wouldn't suggest he seek credit counseling or
debt settlement. He's doing a fine job right now. He is in a tough position, but
it's okay because he's making all his payments on time and is able to pay all bills and
living expenses. He may not be able to save, however, by paying off his debt, he
is saving. He's saving on interest charges. The money that went to the credit
cards will be savings when all the debt is paid off.
I would suggest that he pursue ideas that
generate income. Focus extra time on thinking of a side business or online
business. Think about going back to school (online) to advance in his current
field or jump ship into another career. He may also qualify for government loans
to go back to school. He should ask his employer about education reimbursement
and what he would need to do to advance. In other words, he needs to increase
his income.
Help him generate ideas that make more money. I'm
sure that he's had some in the past and maybe you've had some ideas for him as
well. Simply provide the encouragement and confidence to get him to take action
in that area.
Best,
Scott
Dear Scott:
Thank you so much for the quick reply and the
ideas and words of encouragement. I will pass these along to my friend and will
let you know how it goes.
And yes, I will continue to help him as best I
can, too.
In that vein, do you have any reliable
references/resources for brainstorming ideas on available online businesses?
I've certainly seen plenty of advertising for same (especially infomercials),
but how do you know who to trust and what businesses actually are successful and
generating real income?
I would be interested in supplementing my own
income with an online business as well, since my current job (which I mostly
love) requires me to be available on a flexible schedule 7 days a week, which
prevents me from taking on a second job since I cannot commit to any fixed hours
elsewhere. But with current inflation income has fallen behind my living costs,
and I definitely could use a supplemental income.
Again, thank you so much for what you do--I
know you hear often how much it means to people, and you can add my friend and
myself to that group of fans.
Sincerely,
John G.
John,
You're welcome!
You should be wary of infomercials that talk
about making "easy" money. The only easy money is the money they're making
selling the program. There may be some that are good, but they're hard to find.
I'm talking about developing your own ideas.
Finding a need and filling that need. We've all had the experience of saying
"hey someone should invent this..." and then maybe a few years later you see
that in the invention in the mall.
Or you may think of a service that people need.
Or maybe just break away from you current company and be their competitor. A
close friend of mine did that and started his own pest control business and now
he lives in a million home in Central New Jersey!
Best,
Scott
PS: I have quite a few great articles posted that talk about earning more
money.
You can find them listed here.
Scott:
Thanks--my gut has usually steered me away
from infomercials in general, so your opinion on same only reinforces that
feeling.
I will sit down with my friend and brainstorm,
will do the same on my own, and will check out the articles you linked me to.
Again, thanks so much!!
Sincerely,
John G.
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