Manage Credit Card Debt - Money Management Advice from GreenPath Debt Solutions

Reorganize your financial house now

Control over your credit cards is an important part of the budget

KNIGHT RIDDER/TRIBUNE

There's nothing like a stack of credit-card bills to take stock of your finances, prune away the tangled remnants of past mistakes and get yourself reorganized. Here are tips for cleaning up your finances and starting afresh:

Get a handle on credit cards Did you charge more than you expected over the holidays -- and now you're facing a mound of bills? Put yourself on a credit diet until your bills are under control.

Pay down the cards with the highest interest rate first.

Make more than the minimum monthly payments.

Failure to get out of credit-card debt can color your lifestyle for years.

It takes 37 years to pay off a $6,000 credit-card balance at 17 percent if you're paying just the monthly minimum, according to Mark R. Coats, regional vice president for Primerica, a Citigroup financial services company.

"People are conditioned to asking 'What's the interest rate and what will the payment be?' instead of 'How much will the debt cost me and when will I be debt-free?"' Coats said.

Financial analysts, planners, bankers and credit counselors advise you to be careful if you consolidate credit-card debt into a personal loan.

"Some places will consolidate you back into a revolving loan. Instead, go with an installment loan, which gives you a fixed payment and term," said Greg Voss, personal financial analyst for Primerica.

"Then, have a game plan, where you invest the savings or reallocate the savings toward reducing your mortgage."

Calculate your net worth It can be painful adding up your debts, and it's even tougher subtracting that debt from your assets. But once you have that number, it will help you set financial goals.

Adjust your wage withholding Your tax situation changes when your salary, investment income, filing status and other financial factors change. Get ready by asking your employer for a new W-4 and by using the work sheet to figure out how much tax should be withheld from your paycheck.

Decide why you're saving Jot down your savings goals. Check your retirement plan. Are you where you expected to be?

Mix it up When was the last time you looked at your mix of investments? To determine your mix, or asset allocation, tally separate totals for your holdings of stocks, bonds and cash, and divide each by the total value of the portfolio. If you haven't looked lately, you might be surprised at the mix. Today, because of the bull market in stocks, you might find the mix of your growing portfolio has shifted. It's now 76 percent stocks, 18 percent bonds and 6 percent cash. Are you comfortable with that level of risk?

Organize your tax information Compile and verify records. It's up to you, not the preparer, to check W2s and 1099s for accuracy and to have errors corrected. As documents arrive, stick them in a shoe box or folder. All your paperwork should be in one place. Other documents to save: Form 2439, undistributed long-term capital gains; Form 2119, for previously sold homes; Form K-1, income from partnerships or trusts.

		Reorganize your financial house now Control over your credit cards is an important part of the budget KNIGHT RIDDER/TRIBUNE There's nothing like a stack of credit-card bills to take stock of your finances, prune away the tangled remnants of past mistakes and get yourself reorganized. Here are tips for cleaning up your finances and starting afresh: Get a handle on credit cards Did you charge more than you expected over the holidays -- and now you're facing a mound of bills? Put yourself on a credit diet until your bills are under control. Pay down the cards with the highest interest rate first. Make more than the minimum monthly payments. Failure to get out of credit-card debt can color your lifestyle for years. It takes 37 years to pay off a $6,000 credit-card balance at 17 percent if you're paying just the monthly minimum, according to Mark R. Coats, regional vice president for Primerica, a Citigroup financial services company. "People are conditioned to asking 'What's the interest rate and what will the payment be?' instead of 'How much will the debt cost me and when will I be debt-free?"' Coats said. Financial analysts, planners, bankers and credit counselors advise you to be careful if you consolidate credit-card debt into a personal loan. "Some places will consolidate you back into a revolving loan. Instead, go with an installment loan, which gives you a fixed payment and term," said Greg Voss, personal financial analyst for Primerica. "Then, have a game plan, where you invest the savings or reallocate the savings toward reducing your mortgage." Calculate your net worth It can be painful adding up your debts, and it's even tougher subtracting that debt from your assets. But once you have that number, it will help you set financial goals. Adjust your wage withholding Your tax situation changes when your salary, investment income, filing status and other financial factors change. Get ready by asking your employer for a new W-4 and by using the work sheet to figure out how much tax should be withheld from your paycheck. Decide why you're saving Jot down your savings goals. Check your retirement plan. Are you where you expected to be? Mix it up When was the last time you looked at your mix of investments? To determine your mix, or asset allocation, tally separate totals for your holdings of stocks, bonds and cash, and divide each by the total value of the portfolio. If you haven't looked lately, you might be surprised at the mix. Today, because of the bull market in stocks, you might find the mix of your growing portfolio has shifted. It's now 76 percent stocks, 18 percent bonds and 6 percent cash. Are you comfortable with that level of risk? Organize your tax information Compile and verify records. It's up to you, not the preparer, to check W2s and 1099s for accuracy and to have errors corrected. As documents arrive, stick them in a shoe box or folder. All your paperwork should be in one place. Other documents to save: Form 2439, undistributed long-term capital gains; Form 2119, for previously sold homes; Form K-1, income from partnerships or trusts.