10 steps to reducing your credit card debt

Do you owe more money on your credit cards than you have in your emergency savings? You're not alone -- and the situation isn't hopeless.

Credit card debt is a huge weight on Australian’s finances. According to a recent survey, close to half have more credit card debt than emergency savings.

Issuers have added to the problem. Mailboxes have been filled with credit card offers as issuers aggressively market lucrative rewards and balance transfer cards, especially to consumers with good or excellent credit scores.

Consumers need to stop running up large account balances and getting themselves in a financial pinch, like they were in 2008. Here are 10 tips for reducing credit card debt starting now:

1. Know how much you owe for all credit cards debts. Write down a debt summary that includes the creditor, monthly payment, interest, balance due, credit limit and due date for each loan.

2. Contact your creditors to see if you can negotiate a lower interest rate. The less money you pay in interest, the more money you can use to pay off your credit card balance as well as other bills.

3. Pay off the card with the highest interest rate first. Continue to pay the minimum on your other cards until you pay off the card with the highest rate. Then focus your effort on the card with the next highest rate.

4. Pay more than your minimum payment. Your minimum payment is usually only 2 percent to 5 percent of your balance. At this rate, it will take you many years to pay off your debt. Start with the card with the highest interest rate and try to at least double your minimum payment

5. Balance transfer offers are currently very attractive, so consider transferring your balance to a card with a lower rate. If your rate is above 12 percent, look for a card that offers 0 percent for at least 12 months. To take full advantage of this 0 percent interest, pay as much as you can above the minimum payment each month.

6. If you have a credit card balance, stop using that card for anything other than emergencies. Use cash instead. If you carry a balance, you are paying interest for every purchase, including clothing, entertainment or dinner. Factor that in to each purchase. Paying with cash will not only save money on interest, but will also reduce the amount you spend.

7. Pay your bills on time, every time. Not only may you have to pay a late fee, but late payments can also appear on credit reports. Negative information such as this can result in lower credit scores and higher interest payments.

How to avoid the most common money mistakes

8. Give yourself a realistic timetable to pay off this debt. It took time to accumulate this credit card debt, and it will probably take even more time to pay it off.

9. If you are in danger of missing a payment, or defaulting on your credit card loan, contact your credit card issuer as soon as possible. Your issuer may work out a payment plan with a lower rate or monthly payment if it will help keep your account out of default.

10. Work with a money coach such as Money for Life to get your debt under control. A money coach can help you become aware of the behaviours that lead to money problems, provide someone to be accountable to and help you to develop strategies that will lead you to financial independence.

3 Reasons Bill Gates could get a Message to Garcia

If the world depended on a man, who would you trust? If a message had to get through to save your country, who would you trust to take it?

A book written in 1899 and Bill Gates don’t seem like a likely combination; however, when I discovered “A Message to Garcia,” it challenged me to think of who I would put my money on to get a letter to Garcia today. Who would I trust to do a job that would change the world? I could think of no greater person than Bill Gates.

Throughout history, “A Message to Garcia” has been one of the most powerful books ever written on leadership. It was written in one hour. It is only nine pages long, and yet there have been over 100,000,000 copies sold, and it has been translated into 37 languages and made into two movies. This book has been held up by US, Russian, and Japanese militaries and businesses for over 100 years as an example of the perfect leader.

We have all heard of Mission Impossible. It is something we have become familiar with seeing in movies. The hero, often a retired CIA agent, is given a secret mission, which would be impossible for mortal men. However, the hero is no mortal man. His influence overcomes mere men, the most beautiful women, and incredible obstacles. In the end, he saves the princess and the world from the evil dictator.

The truth is, there really was such a hero, and he did save a large part of the world…and that’s how this book originated.

Rowan was an American Army Officer from West Virginia. In 1899, the Civil war in Cuba took a major turn when unknown forces sank the American battleship Maine in Havana harbor. America entered the war, but to succeed, they required the support of the insurgent forces.

The leader of the insurgent forces was General Garcia. He was hiding in the Oriente Province in the most eastern region of Cuba. It stretches across 14,641 square miles (37,920 km2) and consists of various mountain ranges with the Sierra Maestra region having Cuba’s highest mountain peak and elevation in Pico Turquino. No mail nor telegraph message could reach him.

The US president must secure his cooperation, and quickly, but how? who? Someone said to the President, “There’s a fellow by the name of Rowan will find Garcia for you, if anybody can.”

Rowan was sent for and given a letter to be delivered to Garcia. “The fellow by the name of Rowan took the letter, sealed it up in an oil-skin pouch, strapped it over his heart, and in four days landed by night off the coast of Cuba from an open boat. He disappeared into the jungle and in three weeks came out on the other side of the island, having traversed a hostile country on foot, and delivered his letter to Garcia.”

The book became the stuff of legends.

·        After publication, reprint orders began trickling in, which wasn’t unusual. The trickle became a flood, prompting Hubbard to ask which article triggered the interest. It was “the stuff about Garcia,” he was told.

·        Then, a telegram arrived from George H. Daniels of the New York Central Railroad asking for a price on 1,000 copies of the Rowan article in pamphlet form. Hubbard didn’t have the capacity to fill the order, so he granted permission to reprint. Daniels eventually printed and distributed half a million copies under the title, “A Message to Garcia.”

·        One copy found its way into the hands of Prince Hilakoff, Director of Russian Railways, who had the booklet translated and given to every railroad employee in Russia.

·        The booklet spread to Germany, France, Spain, Turkey, India, and China.

·        Japanese soldiers found the booklet on Russian prisoners during the war and had it translated, distributing it to every Japanese government employee. Over 100 million copies of “A Message to Garcia” were sold, achieving a larger circulation than any other literary venture in the lifetime of the author.

The United States won the Spanish-American War. As a result, Spain ceded Puerto Rico, the Philippines, and Guam to the United States and abandoned all claims to Cuba (which became independent in 1902).

Rowan, by then Colonel Rowan, was decorated for his achievement by the commander of the United States Army, who said, "I regard this achievement as one of the most hazardous and heroic deeds in military warfare."

The forward of the booklet says, "This was undoubtedly true, but it is for his fine moral character, rather than for his military prowess, that Lieutenant Andrew Summers Rowan will always be remembered."

I believe in every generation there must be people who could deliver a letter to Garcia, people who can change the world, people who can make a difference, and one of those is Bill Gates.

Reason 1 - Bill Gates continually puts himself in the right place.

A number of years ago, Bill Gates was interviewed by Larry King. He said this: "I was in the right place, at the right time, and luck had a lot to do with it. However, there were many others in the same place as I was when computers began to gain popularity."

If you want to be a world class actor you don’t go to Diomede, the most remote city in Alaska to live. You go to Hollywood. If you want to develop an App that will make a billion dollars you go to Silicon Valley to live. You put yourself in the right place.

People who want to be great leaders need to put themselves under a great leader. They need to be trained by great leaders and learn from great leaders.

Bill Gates wasn’t in the right place by luck alone. He was in the right place because he had been preparing himself since he was 13. His parents saw his potential and put him in a leading school, one of the first to have a computer. That’s where he began working on his first computer and developing programs for it. He became so good that the school asked him to write programs to schedule students in class. He then went to Harvard.

Reason 2- Bill Gates sees the future and researches his subject with a passion

Great leaders not only put themselves in the best possible place to be trained, coached, and mentored, but they have vision. They see the future and then they learn all that is possible about their subject.

In the interview, he said, “I had a long-term vision of how the personal computer would revolutionize every facet of life. Once again, there were many others with the same vision I had."

There may have been many others who also had a vision, but Bill Gates' vision was bigger than building a computer or a software program. His vision was global—he had a vision to change the world.

Reason 3: Bill Gates is a man of massive and immediate action.

In the interview, Gates said, "I took massive, immediate action. This is where the rubber meets the road.”

In the book “A Letter to Garcia,” Hubbard says, "By the Eternal! There is a man whose form should be cast in deathless bronze and the statue placed in every college in the land. It is not book-learning young men need, nor instruction about this or that, but a stiffening of the vertebrae which will cause them to be loyal to a trust, to act promptly, concentrate their energies; do the thing—carry a message to Garcia!”

In this interview Bill Gates finished saying, “If you're in the right place at the right time and have a vision to see where a new technology is going, but don't take action ... you'll never be successful... Without all three components in place, you're doomed."

Please click here for a free copy of “A Message to Garcia”

13 Ways to save money

Here is a list of 13 ways to save money. Each of these suggestions are simple little moves you can make to improve your financial situation. Some of them take just a few minutes, others might take an hour or two, some of them require a bit of regular effort, but they’re all incredibly simple – anyone can do them. Each of them also save significant money, especially over the long haul, and when combined together these tips can save you a lot of money now.

1.      Switch your bank accounts to a bank that respects you. You shouldn’t be spending your hard-earned money on maintenance fees – you also should be earning reasonable interest on your accounts.

2.      Turn off the television. One big way to save money is to watch less television. There are a lot of financial benefits to this: less exposure to guilt-inducing ads, more time to focus on other things in life, less electrical use, and so on. It’s great to unwind in the evening, but seek another hobby to do that.

3.      Turn a critical eye to your “collections.” Most people collect something – what do you collect? Is it something that consistently brings you joy? Or is it something that you just do out of habit at this point? Does the collection itself have value? Could you perhaps “trim the fat” from this collection by getting rid of duplicates or getting rid of the items you no longer use? Also, could you perhaps cut down on your spending on that hobby? Focus on trimming the things you don’t feel strongly about – if you dig into things that bother you, you’re going to eventually relapse.

4.      Make your own gifts instead of buying stuff. You can make food mixes, candles, bread, and all kinds of other things at home quite easily and inexpensively. These make spectacular gifts for others because they involve your homemade touch, plus quite often they’re consumable, meaning they don’t wind up filling someone’s closet with junk. Even better – include a personal handwritten note with the gift. This will make it even more special than anything you could possibly buy, plus it saves you money.

5.      Master the thirty day rule. Whenever you’re considering making an unnecessary purchase, wait thirty days and then ask yourself if you still want that item. Quite often, you’ll find that the urge to buy has passed and you’ll have saved yourself some money by simply waiting. If you want, you can even keep a “thirty day list” where you write down the item and the day you’ll reconsider it, but I prefer just to keep this one in my head – that way, I often just forget about the unimportant things.

6.      Write a list before you go shopping – and stick to it. You should never go into a store without a strong idea of what you will be buying while in there. Make a careful plan of what you’ll buy before you go, then stick strictly to that list when you go to the store. Don’t put anything in the cart that’s not on the list, no matter how tempting, and you’ll come out of the store saving a bundle.

7.      Invite friends over instead of going out. Almost every activity at home is less expensive than going out. Invite some friends over and have a meal, then play some cards or other games and have a few drinks. Everyone will have fun, the cost will be low, and the others will likely reciprocate not long afterwards.

8.      Instead of throwing out some damaged clothing, repair it instead. Don’t toss out a shirt because of a broken button – sew a new one on with some closely-matched thread. Don’t toss out pants because of a hole in them – put in a patch of some sort and save them for times when you’re working around the house. Simple sewing can be done by anyone – it just takes a few minutes and it saves a lot of money by keeping you from buying new clothes when you don’t really need to.

9.      Don’t spend big money entertaining your children. Most children, especially young ones, can be entertained very cheaply. Make a game out of ordinary stuff around the house, like tossing small coins into a jar, even. Realize that what your children want most of all is your time, not your stuff, and you’ll find money in your pocket and joy in your heart.

10.   Clean out your closet. Go through your closets and try to get rid of some of the stuff in there. You can have a garage sale with it, sell it on Ebay or Gumtree - all of which turn old stuff you don’t want to use any more into money in your pocket.  If you don’t want to sell it, give it to a charity op-shop  Not only that, it’s often a psychological load off your mind to clean out your closets.

11.   Drink more water. Not only does drinking plenty of water have great health benefits, water drinking has financial benefits, too because water is the cheapest drink in the house. You’ll also find yourself feeling a bit better as you begin to get adequately hydrated (most Australians are perpetually somewhat dehydrated).

12.   Cut back on the convenience foods – fast foods, microwave meals, and so on. Instead of eating fast food or just nuking some pre-packaged food when you get home, try making some simple and healthy replacements that you can take with you. An hour’s worth of preparation one weekend can give you a ton of cheap and handy meals that will end up saving you a lot of cash and not eat into your time when you’re busy.

13.   Give up expensive habits, like cigarettes, alcohol, and drugs. Those habits cause money to flow away from you with nothing in return. Call up your fortitude and work hard to kick the habits and you’ll find that money staying in your pocket instead of burning up and floating away.