Financial Mishaps

A few weeks ago, we introduced the terms unsecured and secured credit. Melinda did a great job of defining the terms in her "Simple Does It" series, and now that we have a great definition base, it's time to put those definitions to work!

I’m sure everyone’s seen “The Money Pit”. If not, definitely go check it out; it’s an oldie but goody that many people can relate to. If you haven’t seen it, here’s the rundown: Walter Fielding (Tom Hanks) and his girlfriend Anna Crowley (Shelley Long) purchase a “distressed” mansion with plans to renovate. The plans go awry through a series of housing issues, from muddy plumbing to raccoon infestation, and the couple must sink into complete debt to repair (shall I say entirely reconstruct?) the home.

Nowadays it's hard for many people to make ends meet. Lost jobs, fewer hours, piles of medical bills and countless other problems have created difficult financial situations for many Americans. These problems have forced honorable people to miss payments on everything from homes to cars to school loans.

I know some pretty frugal people. They can live on very little money yet manage to enjoy every moment of life to its fullest. Now I must say that frugal living is fantastic: below-means living can be one of the best ways to make dollars stretch, to pay off debts and to save for a rainy day. But planning to live very frugally in retirement can be a recipe for disaster. Why? Well let’s take a look.

The Frugal Retirement Myth

So you got an offer for a 12 month, 0% APR credit card in the mail. It may be tempting to pay off your 14.9% APR Discover Card with this new offer credit card. Really, who wouldn’t consider jumping at 0%? Well, before you jump in, you may want to consider a few things first. Let’s take a look at how using a special offer credit card to pay off an established card can actually hurt more than you might think.

Hidden Fees