11 ways to Get out and Stay out of Debt

The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Founder and Director of Holistic Investment Planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in.

In spite of steady, regular income there are so many individuals who live paycheque to paycheque, carry their credit card outstanding, and fail to save anything for retirement. If you are one of them, now is the right time to take action to come out of debt and stay out of debt. It is not only possible; it is unbelievably achievable.

1. List down all your debts

You need to take stock of all your loans. It could be credit card due, personal loan, car loan, housing loan, education loan, loan from FD, loan from insurance policies, loan from your employer, hand loan and so on. For each and every loan you need to note down how much you owe, the present interest rate, EMI, Number of months to be paid.

2. Negotiate for lower interest rates

If you could negotiate the interest rate and bring it down then you can come out of debt faster. Most of the credit card companies come forward for negotiation if you really show interest in repaying. They need not run after you to collect the debt. It will reduce their expenses. So they will be happy to negotiate. Balance transfer offers from credit cards are also a way to reduce your interest rate.

3. Refinancing and consolidation

Replacing a loan with another is known as Refinancing. By doing a refinance it should reduce your interest rate and it should bring down the time you are in debt. But most often people go for refinance that provide them lower EMI but increasing the time they stay in debt.

4. Categorize your debt

Housing loan can increase your net worth over a period of time. Housing loan gives you tax benefit also. For a business man car loan provides some tax benefit. Based on these factors a debt needs to be categorized. This will help us in comparing different loans.

5. Prioritize your debts

After sorting out various loans, now we can comfortably prioritize the loans. Obviously this will be based on the interest rates and tax benefits. At times paying off a small loan first can give you a lot of motivation to get out of debt.

6. Creating and Executing a Debt payoff plan

You need to create a debt pay off plan with different scenarios. So that you can find out how some more savings or a different repayment order will help you to get out of debt faster. When creating a plan, you need to choose one which is comfortable to your attitude. Otherwise, you may not execute it properly.

7. Refrain yourselves from applying for fresh loans

You need to make a vow that you will not be adding any fresh loans, till you come out of all your debts completely. Think for a moment, how you will feel when you become debt free. This will give you a lot of positive energy to come out and stay out of debt.

8. Postpone buying major assets

Buying a property or any other assets need to be postponed till you get out of debt. With your new ownership comes the new, probably large and unpredictable expense. This can make you deviate from your debt pay off plans and at times the consequences could be uncontrollable.

9. You stop using your credit card

There are two groups. One group of people uses the credit cards responsibly. That is they will repay the credit card dues in full when they receive the bill. The other group will pay the minimum amount due and carry forward the balance amount due. If you belong to the second group, you need to stop using credit cards temporarily. Take out and keep your credit cards in the locker. Once your financial situation and buying habits improve, then you can start using your credit cards again.

10. Change your spending habits.

Being in debt obviously means that you have been living beyond your means. The solution is very simple. Spend less than you earn and you will get out of debt soon. You need to change your spending habits. Then only this simple solution will be achievable. If you buy things you don’t need, you’ll soon sell things you need. Don’t save what is left after spending; spend what is left after saving.

11. Involve all your family members

You need to inform all your family members and dependents about your debt status. Then you will be able to take decisions with much more clarity. Moreover, if your family members know about your debt, they will also change their spending habits and support you in getting out of debt faster.

Consider the postage stamp: Its usefulness consists in the ability to stick to one thing till it gets there. Similarly, you need to stick to your debt pay off plan till you get out of it.

Wordless Thursday – 15 Things you did not know about the dead

Death is not the best topic in the world, but still for Wordless Thursday this week is 15 things that you did not know about the dead. Did you know that a human head stays conscious for 15 – 20 seconds after decapitation ? and a cockroach up to 9 days ? Interesting facts that you might have not thought about or had no idea about at all are portrayed in this interesting info graphic.

Top 15 Technology predictions that failed

[tweetmeme] Technology predictions everyone likes to do it, including yours truly. Interestingly,  a lot of people are wrong, and when Its famous people talking about future famous technologies. But like always, no one can actually predict the actual future of technology. What might happen next is definitely just a matter of speculation. Here are 15 of the most interesting predictions that failed.

The Automobile / Car

15. “The horse is here to stay but the automobile is only a novelty – a fad.” — The president of the Michigan Savings Bank advising Henry Ford’s lawyer, Horace Rackham, not to invest in the Ford Motor Co., 1903.

Movies

14. “The cinema is little more than a fad. It’s canned drama. What audiences really want to see is flesh and blood on the stage.” -– Charlie Chaplin, actor, producer, director, and studio founder, 1916

Atom Bomb

13. “There is not the slightest indication that nuclear energy will ever be obtainable. It would mean that the atom would have to be shattered at will.” — Albert Einstein, 1932 (Yes, Albert Einstein)

12. “The energy produced by the breaking down of the atom is a very poor kind of thing. Anyone who expects a source of power from the transformation of these atoms is talking moonshine.” — Ernest Rutherford, shortly after splitting the atom for the first time.

11. “This is the biggest fool thing we have ever done. The bomb will never go off, and I speak as an expert in explosives.” — Admiral William D. Leahy, Chief of Staff to the Commander in Chief of the Army and Navy during World War II, advising President Truman on the atomic bomb, 1945.[6] Leahy admitted the error five years later in his memoirs

Nuclear Technology in Homes

10. “Nuclear-powered vacuum cleaners will probably be a reality in 10 years.” -– Alex Lewyt, president of vacuum cleaner company Lewyt Corp., in the New York Times in 1955. (Don’t really think it would have sold really well)

Airplanes and Flight

9. “There will never be a bigger plane built.” — A Boeing engineer, after the first flight of the 247, a twin engine plane that holds ten people

8. “Heavier-than-air flying machines are impossible.” — Lord Kelvin, British mathematician and physicist, president of the British Royal Society, 1895.

7. “Flight by machines heavier than air is unpractical (sic) and insignificant, if not utterly impossible.” – Simon Newcomb; The Wright Brothers flew at Kittyhawk 18 months later.

6. “A rocket will never be able to leave the Earth’s atmosphere.” — New York Times, 1936.

Communication and Telephones

5. “This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.” — A memo at Western Union, 1878 (or 1876).

4. “There is practically no chance communications space satellites will be used to provide better telephone, telegraph, television, or radio service inside the United States.” — T. Craven, FCC Commissioner, in 1961 (the first commercial communications satellite went into service in 1965).

3. “Lee DeForest has said in many newspapers and over his signature that it would be possible to transmit the human voice across the Atlantic before many years. Based on these absurd and deliberately misleading statements, the misguided public … has been persuaded to purchase stock in his company …” — a U.S. District Attorney, prosecuting American inventor Lee DeForest for selling stock fraudulently through the mail for his Radio Telephone Company in 1913.

Computers and Operating Systems

2. “We will never make a 32 bit operating system.” — Bill Gates

1. “There is no reason anyone would want a computer in their home.” — Ken Olson, president, chairman and founder of Digital Equipment Corp. (DEC), maker of big business mainframe computers, arguing against the PC in 1977.

Hmm, so do you want to make a prediction ? you can mention your predictions below, lets see in a few months or years if it does come true.

How to mess up your computer ?

[tweetmeme] A lot of “IT Guys”, including friends of mine have been helping most people around with information regarding how to save the computer crashes, Data, Operating System management etc. But there is definitely one thing that we cannot help do, and that is prevention. As the saying goes “Prevention is better than cure”.

Keeping this in mind I wanted to put together a list of everyday things that might mess up your computer, without any more bullshit, here are the 9 things that you should do if you want to mess up your computer.

  1. Surf the Internet without a Firewall : Many internet users mostly at home plug their computers right into their cable or DSL modems and hop onto the Internet without realizing that they’re putting themselves at risk from viruses and attackers. Every Internet-connected computer should be protected by a firewall; this can be a firewall built into the broadband modem or router, a separate firewall appliance that sits between the modem/router and the computer, a server at the network’s edge running firewall software, or personal firewall software installed on the computer (such as ICF/Windows Firewall built into Windows XP or a third-party firewall program like Kerio or ZoneAlarm). One advantage of personal firewalls on laptop computers is that they’re still with you when you take the computer on the road and plug into a hotel’s DSL or cable port or connect to a wireless hotspot. Just having a firewall isn’t enough, though. You must also be sure it’s turned on and configured properly to protect you.
  2. Neglect to run or Update Antivirus and/or Anti Spyware programs : Let’s face it: Antivirus programs can be a royal pain. They’re always blocking some application you want to use, you often have to disable them to install new software, and they have to be updated on a regular basis to do any good. Seems like the subscription is always expiring and prompting you to renew it–for a fee, in many cases. But in today’s environment, you can’t afford to go without virus protection. The malicious programs that AV software detects–viruses, Trojans, worms, etc.–can not only wreak havoc on your system but can spread via your computer to the rest of the network. In extreme cases, they can bring down the whole network. Spyware is another growing threat; these are programs that install themselves on your computer (usually without your knowledge) and collect information from your system that is then sent back to the spyware program’s author or vendor. Antivirus programs often don’t address spyware so it’s important to run a dedicated spyware detection and removal program.
  3. Install and uninstall lots of programs : There are so many freeware and shareware programs made available as Internet downloads by their authors. We know we all do it, but some users even install pirated software or “warez.” The more programs you install, the more likely you are to run across ones that either include malicious code or that are poorly written and cause your system to behave improperly or crash. The risk is greater with pirated programs. en if you install only licensed, final-release commercial software, too many installations and uninstallations can gunk up the registry. Not all uninstall routines completely remove program remnants and at the least, this practice can cause your system to slow down over time. You should install only the programs that you really need, stick with legitimate software, and try to minimize the number you install and uninstall.
  4. Keep disks full and fragmented : One of the results of installing and uninstalling lots of programs (or adding and deleting data of any kind) is that it fragments your disk. Disk fragmentation occurs because of the way information is stored on the disk: On a new, clean disk, when you save a file it’s stored in contiguous sections called clusters. If you delete a file that takes up, for example, five clusters, and then save a new file that takes eight clusters, the first five clusters’ worth of data will be saved in the empty space left by the deletion and the remaining three will be saved in the next empty spaces. That makes the file fragmented, or divided. To access that file, then, the disk’s read heads won’t find all the parts of the file together but must go to different locations on the disk to retrieve it all. That makes it slower to access. If the file is part of a program, the program will run more slowly. A badly fragmented disk will slow down to a crawl. You can use the disk defragmenter built into Windows (Programs | Accessories | System Tools) or a third-party defrag program to rearrange these pieces of files so that they’re placed contiguously on the disk.Another common cause of performance problems and application misbehavior is a disk that’s too full. Many programs create temporary files and need extra free space on the disk to operate. You can use Windows XP’s Disk Cleanup Tool or a third-party program to find and delete rarely used files, or you can manually delete files to clear space on your disk.
  5. Open all attachments : Some folks just can’t help themselves: Getting an e-mail message with an attachment is like getting an unexpected gift. You just have to peek inside to see what it is. But just as that package left on your doorstep could contain a bomb, that file attached to your mail message could contain code that will delete your documents or system folder or send viruses to everyone in your address book. The most blatantly dangerous attachments are executable files–those that run code–with extensions like .exe, .cmd, and many others (see http://antivirus.about.com/od/securitytips/a/fileextview.htm for a list of file extensions for different types of executables). Files that aren’t themselves executables, such as Word .doc files and Excel .xls files, can contain embedded macros. Scripts (Visual Basic, JavaScript, Flash, etc.) aren’t directly executed by the computer but are run by other programs. It used to be that you could assume plain text (.txt) or graphics (.gif, .jpg, .bmp) files were safe, but not anymore. File extensions can be spoofed; attackers take advantage of the Windows default setting that doesn’t display common file extensions to name executables something like greatfile.jpg.exe. With the real extension hidden, it shows up as greatfile.jpg. So the recipient thinks it’s a graphic, but it’s actually a malicious program. You should open attachments only when they’re from trusted sources and only when you’re expecting them. Even if the mail with the attachment appears to come from someone you trust, it’s possible that someone spoofed their address or that their computer is infected with a virus that sent the attachment to you without their knowledge.
  6. Click on everything : Opening attachments isn’t the only type of mouse click that can get you in trouble. Clicking on hyperlinks in e-mail messages or on Web pages can take you to Web sites that have embedded ActiveX controls or scripts that can perform all sorts of malicious activities, from wiping your hard disk to installing a backdoor program on your computer that a hacker can use to get in and take control of it. Clicking the wrong link can also take you to inappropriate Web sites that feature pornography, pirated music or software, or other content that can get you in trouble if you’re using a computer on the job or even get you in trouble with the law. Don’t give in to “click mania.” Think before you click a link. Links can also be disguised in phishing messages or on Web sites to appear to take you to a different site from the ones they really point to. For example, the link might say www.safesite.com, but it actually takes you to www.gotcha.com. You can often find out the real URL by hovering over the link without clicking it.
  7. Pick the wrong passwords : That brings us to another common mistake that can expose you to attacks: picking the wrong password. Even if you don’t belong to a network where the administrator forces you to select strong passwords and change them regularly, you should do so. Don’t pick passwords that are easy to guess, such as your birthdate, loved one’s name, etc. Longer passwords are harder to crack, so make your password at least eight characters long; 14 is even better. Popular password-cracking methods use “dictionary” attacks, so don’t use words that are in the dictionary. Passwords should contain a combination of alpha, numeric, and symbol characters for best security. A long string of nonsense characters may create a password that’s tough to crack, but if you can’t remember it, you’ll defeat the purpose by writing it down (where an intruder may be able to find it). Instead, create a phrase you can remember easily and use the first letters of each word, along with logical numbers and symbols. For example: “My cat ate a mouse on the 5th day of June” becomes “Mc8amot5doJ.”
  8. Ignore the need for a backup and recovery plan : Even if you follow all these suggestions, an attacker may crash your system or your data may be corrupted or get wiped out by a hardware problem. That’s why it’s essential that you always back up your important information and have a plan for recovering from a system failure. Most computer users know they should back up, but many never get around to it. Or they make an initial backup but don’t update it regularly. Use the built-in Windows backup program (Ntbackup.exe in Windows NT, 2000, and XP) or a third-party backup program and schedule backups to occur automatically. Store backed up data on a network server or removable drive in a location away from the computer itself, in case of a natural disaster like flood, fire, or tornado.Remember that the data is the most important thing on your computer. The operating system can be reinstalled and so can applications, but it may be difficult or impossible to recreate your original data. Nonetheless, you can save time and frustration by backing up your system information too. You can create mirror images of your disks using popular ghost or clone programs. This will allow you to restore the system quickly instead of going through the tedious installation process.
  9. Plug into the wall without surge protection : Here’s one that actually can physically destroy your computer equipment, as well as the data it holds. You may think your systems are in danger only during an electrical storm, but anything that interrupts the electrical circuit and then starts the current back again can fry your components. Something as simple as someone turning on an appliance that’s plugged into the same circuit (especially a high voltage one such as a hair dryer, electric heater, or air conditioner) can cause a surge, or a surge may be caused by a tree limb touching a power line. If you have a power outage, you may experience a surge when the electricity comes back on. You can protect your systems against damage from power surges by always using a surge protector, but it’s important to be aware that most cheap surge protectors will survive only a single surge and need to be replaced afterward. An Uninterruptible Power Supply (UPS) is better than a surge protector; it has a battery that keeps power flowing smoothly even when there’s an outage, to give you time to gracefully shut down.

I really again wanna remind you all that, well there are tools that are available for going about fixing your computer and I will come through with it, in later posts. But for now, this is your list of things not to do :)