Everyone with even a little bit of debt has to manage their debt. If you just have a little debt, you have to keep up your payments and make sure it doesn’t get out of control. On the other hand, when you have a large amount of debt, you have to put more effort into paying off your debt while juggling payments on the debts you’re not currently paying.
Know How Much You Owe
Make a list of your debts, including the creditor, total amount of the debt, monthly payment, interest rate, and due date. You can use your credit report to confirm the debts on your list. Having all the debts in front of you will allow you to see the bigger picture and stay aware of your complete debt picture. Debt reduction software can make this process easier.
Once you have a handle on your debt and your income, you can calculate your Debt to Income ratio (DTI). This ratio tells you how much of your income is going toward debt payments. To find yours, divide your debt payments by your income, and multiply by 100. For example, $1,200 of monthly debt divided by $3,000 of monthly income is 0.4 x 100 = 40%. The lower this number is, the better, and tracking it can help you understand your finances more clearly.
Don’t just create your list and forget about it. Refer to your debt list periodically, especially as you pay bills. Update your list every few months as the total amount of your debt changes.
Pay Your Bills on Time Each Month
Late payments make it harder to pay off your debt since you’ll have to pay a late fee for every payment you miss. If you miss two payments in a row, your interest rate and finance charges will increase.
If you use a calendaring system on your computer or smartphone, enter your payments there and set an alert to remind you several days before your payment is due. If you miss a payment, don’t wait until the next due date to send your payment, by then it could be reported to a credit bureau. Instead, send your payment as soon as you remember that it was missed.
A budget can help you stay out of debt, and it can help you climb out. It allows you to see how much money you earn and where that money is going. Create a bare-bones budget that allows you to pay for necessities like your rent or mortgage and utilities. Set aside everything else to pay off your debt as quickly as possible.
Create a Monthly Bill Payment Calendar
Use a bill payment calendar to help you figure out which bills to pay with which paycheck. On your calendar, write each bill’s payment amount next to the due date. Then, fill in the date of each paycheck. If you get paid on the same days every month—the 1st and 15th—you can use the same calendar from month to month. But, if your paychecks fall on different days of the month, you’ll need to create a calendar every month.
Make at Least the Minimum Payment
If you can’t afford to pay anything more, at least make the minimum payment. Of course, the minimum payment doesn’t help you make real progress in paying off your debt. But, it keeps your account in good standing, which avoids late fees. When you miss payments, it becomes harder to catch up and eventually your accounts could go into default.
While you’re working on paying down debt, stop using credit cards. Start carrying cash instead. Stick to the budget you created and only buy what you can pay for with cash.
Decide Which Debts to Pay Off First
Paying off credit card debt first is often the best strategy because credit cards have higher interest rates than other debts.1 Of all your credit cards, the one with the highest interest rate usually gets priority on repayment because it’s costing the most money.
Use your debt list to prioritize and rank your debts in the order you want to pay them off. You can also choose to pay off the debt with the lowest balance first. This might cost a little more in the long run, but knocking off small debts first can build confidence.
Pay Off Collections and Charge-Offs
You can only pay as much on your debt as you can afford. When you have limited funds for repaying debt, focus on keeping your other accounts in good standing. Don’t sacrifice your positive accounts for those that have already affected your credit. Instead, pay those past due accounts when you can afford to do it.
Build an Emergency Fund to Fall Back On
Without access to savings, you’d have to go into debt to cover an emergency expense. Even a small emergency fund will cover little expenses that come up every once in a while.
First, work toward creating a small emergency fund—$1,000 is a good place to start. Once you have that, make it your goal to create a bigger fund, like $2,000. Eventually, you want to build up a reserve of three to six months of living expenses.
Don’t Confuse Wants and Needs
It’s easy to convince yourself that you “need” to purchase a new tv or that you “need” to go on vacation. The truth is, there aren’t that many true needs in life. You need food, shelter, clothing, transportation, and things like that. You want steak, a nice house in the suburbs, designer labels, and a luxury car, for example.
Recognize the Signs That You Need Help
If you find it hard to pay your debt and other bills each month, you may need to seek outside help, like a credit counseling agency. Other options for debt relief are:
These each have advantages and disadvantages, so weigh your options carefully.
What is debt consolidation?
Debt consolidation is rolling your debts into a product that offers a single payment and a lower interest rate. Popular debt consolidation tools include personal loans and 0% interest balance-transfer credit cards.
What is debt settlement?
Debt settlement is when you negotiate with a creditor to settle your debt for less than you owe. Creditors will typically only settle debt that isn’t current. If you stop making payments in order to settle debt, your credit score will drop due to the missed payments. You can hire debt settlement companies, but they charge fees for resolving your debt. You can settle debt on your own or consider another option like credit counseling.
The IMF, a grouping made up of 190 member states, promotes international financial stability and monetary cooperation. It also acts as a lender of last resort for countries in financial crisis.
In the IMF’s latest World Economic Outlook report released on Tuesday, the group’s economists say the most important policy priority is to vaccinate sufficient numbers of people in every country to prevent dangerous mutations of the virus. He stressed the importance of meeting major economies’ pledges to provide vaccines and financial support for international vaccination efforts before new versions derail. “Policy choices have become more difficult … with limited scope,” IMF economists said in the report.
The IMF in its July report cut its global growth forecast for 2021 from 6% to 5.9%, a result of a reduction in its projection for advanced economies from 5.6% to 5.2%. The shortage mostly reflects problems with the global supply chain that causes a mismatch between supply and demand.
For emerging markets and developing economies, the outlook improved. Growth in these economies is pegged at 6.4% for 2021, higher than the 6.3% estimate in July. The strong performance of some commodity-exporting countries accelerated amid rising energy prices.
The group maintained its view that the global growth rate would be 4.9% in 2022.
In key economics, the growth outlook for the US was lowered by 0.1 percentage point to 6% this year, while the forecast for China was also cut by 0.1 percentage point to 8%. Several other major economies saw their outlook cut, including Germany, whose economy is now projected to grow 3.1% this year, down 0.5 percent from its July forecast. Japan’s outlook was down 0.4 per cent to 2.4%.
While the IMF believes that inflation will return to pre-pandemic levels by the middle of 2022, it also warns that the negative effects of inflation could be exacerbated if the pandemic-related supply-chain disruptions become more damaging and prolonged. become permanent over time. This may result in earlier tightening of monetary policy by central banks, leading to recovery back.
The IMF says that supply constraints, combined with stimulus-based consumer appetite for goods, have caused a sharp rise in consumer prices in the US, Germany and many other countries.
Food-price hikes have placed a particularly severe burden on households in poor countries. The IMF’s Food and Beverage Price Index rose 11.1% between February and August, with meat and coffee prices rising 30% and 29%, respectively.
The IMF now expects consumer-price inflation in advanced economies to reach 2.8% in 2021 and 2.3% in 2022, up from 2.4% and 2.1%, respectively, in its July report. Inflationary pressures are even greater in emerging and developing economies, with consumer prices rising 5.5% this year and 4.9% the following year.
Gita Gopinath, economic advisor and research director at the IMF, wrote, “While monetary policy can generally see through a temporary increase in inflation, central banks should be prepared to act swiftly if the risks to rising inflation expectations are high. become more important in this unchanged recovery.” Report.
While rising commodity prices have fueled some emerging and developing economies, many of the world’s poorest countries have been left behind, as they struggle to gain access to the vaccines needed to open their economies. More than 95% of people in low-income countries have not been vaccinated, in contrast to immunization rates of about 60% in wealthy countries.
IMF economists urged major economies to provide adequate liquidity and debt relief for poor countries with limited policy resources. “The alarming divergence in economic prospects remains a major concern across the country,” said Ms. Gopinath.
Yuka Hayashi covers trade and international economy from The Wall Street Journal’s Washington bureau. Previously, she wrote about financial regulation and elder protection. Before her move to Washington in 2015, she was a Journal correspondent in Japan covering regional security, economy and culture. She has also worked for Dow Jones Newswires and Reuters in New York and Tokyo. Follow her on Twitter @tokyowoods
O’Sullivan, Arthur; Sheffrin, Steven M. (2003) [January 2002]. Economics: Principles in Action. The Wall Street Journal:Classroom Edition (2nd ed.). Upper Saddle River, New Jersey 07458: Pearson Prentice Hall: Addison Wesley Longman. p. 341. ISBN0-13-063085-3.
The Theory of Money and Credit, Mises (1912, [1981], p. 272)
Humphrey, Thomas M.; Timberlake, Richard H. (2019). Gold, the Real Bills Doctrine, and the Fed : sources of monetary disorder 1922-1938 (First ed.). Washington, D.C.: Cato Institute. ISBN978-1-948647-13-7.
Bulkley, George (March 1981). “Personal Savings and Anticipated Inflation”. The Economic Journal. 91 (361): 124–135. doi:10.2307/2231702. JSTOR2231702.
“Les Egyptiens souffrent aussi de l’accélération de l’inflation”, Céline Jeancourt-Galignani – La Tribune, February 10, 2011
The pace of U.S. hiring accelerated in June, with payrolls increasing by the most in 10 months, suggesting firms are having greater success recruiting workers to keep pace with the economy’s reopening.
Nonfarm payrolls jumped by 850,000 last month, bolstered by strong job gains in leisure and hospitality, a Labor Department report showed Friday. The unemployment rate edged up to 5.9% because more people voluntarily left their jobs and the number of job seekers rose.
The median estimate in a Bloomberg survey of economists was for a 720,000 rise in June payrolls. “Things are picking up,” said Nick Bunker, an economist at the job-search company Indeed. “While labor supply may not be as responsive as some employers might like, they are adding jobs at an increasing rate.”
The gain in payrolls, while well above expectations, doesn’t markedly raise pressure on the Federal Reserve to pare monetary policy support for the economy. Even with the latest advance, U.S. payrolls are still 6.76 million below their pre-pandemic level.
Demand for labor remains robust as employers strive to keep pace with a firming economy, fueled by the lifting of restrictions on business and social activity, mass vaccinations and trillions of dollars in federal relief.
At the same time, a limited supply of labor continues to beleaguer employers, with the number of Americans on payrolls still well below pre-pandemic levels.
Coronavirus concerns, child-care responsibilities and expanded unemployment benefits are all likely contributing to the record number of unfilled positions. Those factors should abate in the coming months though, supporting future hiring.
Wage growth is also picking up as businesses raise pay to attract candidates. The June jobs report showed a hefty 2.3% month-over-month increase in non-supervisory workers’ average hourly earnings in the leisure and hospitality industry. Overall average earnings rose 0.3% last month.
“The strength of our recovery is helping us flip the script,” Biden said in remarks Friday. “Instead of workers competing with each other for jobs that are scarce, employers are competing with each other to attract workers.”
The Labor Department’s figures showed a 343,000 increase in leisure and hospitality payrolls, a sector that’s taking longer to recover because of the pandemic.
Job growth last month was also bolstered by a 188,000 gain in government payrolls. State and local government education employment rose about 230,000, boosted by seasonal adjustments to offset the typical declines seen at the end of the school year.
Hiring was relatively broad-based in June, including other notable gains in business services and retail trade. However, construction payrolls dropped for a third straight month and manufacturing employment rose less than forecast.
“Most of the new jobs now being created are in sectors that were slammed by the pandemic, while companies in other industries are struggling to find available workers,” Sal Guatieri, senior economist at BMO Capital Markets, said in a note.
The overall participation rate held steady and remained well short of pre-pandemic levels. The employment population ratio, or the share of the population that’s currently working, was also unchanged.
Digging Deeper
Average weekly hours decreased to 34.7 hours from 34.8
The participation rate for women age 25 to 54 rose by 0.4 percentage point; the rate among men in that age group also climbed
The number of Americans classified as long-term unemployed, or those who have been unemployed for 27 weeks or more, increased by the most since November
The U-6 rate, also known as the underemployment rate, fell to a pandemic low of 9.8%. The broad measure includes those who are employed part-time for economic reasons and those who have stopped looking for a job because they are discouraged about their job prospects
The labor force is the actual number of people available for work and is the sum of the employed and the unemployed. The U.S. labor force reached a high of 164.6 million persons in February 2020, just at the start of the COVID-19 pandemic in the United States. The U.S. labor force has risen each year since 1960, with the exception of the period following the Great Recession, when it remained below 2008 levels from 2009-2011.
The labor force participation rate, LFPR (or economic activity rate, EAR), is the ratio between the labor force and the overall size of their cohort (national population of the same age range). Much as in other countries in the West, the labor force participation rate in the U.S. increased significantly during the later half of the 20th century, largely because of women entering the workplace in increasing numbers. Labor force participation has declined steadily since 2000, primarily because of the aging and retirement of the Baby Boom generation.
Analyzing labor force participation trends in the prime working age (25-54) cohort helps separate the impact of an aging population from other demographic factors (e.g., gender, race, and education) and government policies. The Congressional Budget Office explained in 2018 that higher educational attainment is correlated with higher labor force participation for workers aged 25–54. Prime-aged men tend to be out of the labor force because of disability, while a key reason for women is caring for family members.
The Congressional Budget Office explained in 2018 higher educational attainment is correlated with higher labor force participation. Prime-aged men tend to be out of the labor force due to disability, while a key reason for women is caring for family members. To the extent an aging population requires the assistance of prime-aged family members at home, this also presents a downward pressure on this cohort’s participation.
The coronavirus pandemic has a lot of dark sides. Around the world, people get ill and die, schools close, the healthcare system is overloaded, employees lose their jobs, companies face bankruptcy, stock markets collapse and countries have to spend billions on bailouts and medical aid. And for everyone, whether directly hurt or not, Covid-19 is a huge stressor shaking up our psyche, triggering our fears and uncertainties.
No matter how serious and sad all of this is, there are upsides as well. Therefore, along the Monty Python song “Always look on the bright side of life” let’s not forget those and make the best of what the crisis gives us. As the good old SWOT analysis tells us, there are not only threats, but also opportunities. With opportunities I don’t mean that the crisis provides extra business for companies like Zoom and Go to Webinar that enable virtual meetings, or for Amazon, which is planning to hire another 100,000 employees. The latter is probably more a threat than an opportunity for most, especially for the mom & pop stores that go through difficult times already.
With opportunities I mean general opportunities that are available for most people affected by the crisis. The current crisis offers at least seven of them:
Opportunity 1: More time
In today’s overheated economy time is often seen as the most valuable and sparse thing we have. Covid-19 shows why: because we have stacked our week with social gatherings and entertainment such as going to the theater, birthdays, cinema, restaurant, bar, sportclub, gym, music, festivals, concerts and what is more. Suddenly, all of that is cancelled or forbidden, giving us significant amounts of extra time. And still, live goes on. This shows us how easy it is to clear our calendars. Obviously this doesn’t apply to the health-care sector and other crucial sectors, but beyond those it applies to a large majority of sectors.
The opportunity is that we can spend this time on other things—or even better, on nothing and enjoy the free time. Looking at the crowded parks, waste collection points, garden centres and DIY stores in the last week, many people seem to have a hard time with the latter. Instead of enjoying the extra free time, they fill it immediately with other activities. To seize this first opportunity though, re-arranging how you spend your time and reserving time for nothingness is key. Not just during the crisis, but also after it. The advices in my previous article on the Covid-19 crisis could help in realizing this.
Opportunity 2: Reflect and reconsider
The fact that the coronavirus disrupts our day-t0-day lives provides an opportunity to reflect on things and to reconsider what we do, how we do it and why we do it. Things we took for granted—like going to the gym—are suddenly not possible anymore. Furthermore, many people have had to change their mode of working and work from home instead of at the office. This means that a lot of our routines are interrupted. MORE FOR YOUWhy KPIs Don’t Work; And How To Fix ThemHow Cisco Takes Care Of Its EmployeesWhat Business Leaders Can Learn From The Special Forces
This offers a great opportunity to rethink our habits and routines and make changes. Now that you haven’t been able to go to the restaurant twice a week, commute 2 hours per day, hang out with your friends or go to a party every weekend, you can reflect on whether you really want to continue doing so after the crisis. The virus forces you to make changes to your daily life that you might actually want to keep also after the crisis.
Opportunity 3: Speed and innovation
Many organizations suffer from slow procedures, complex bureaucracies and rigid hierarchies making organizational life less than pleasant. The coronavirus has forced many of them to break through these rigid systems and act instantly. Suddenly procedures can be skipped or accelerated, rules can be side-tracked and decisions can be made more autonomously without formal approval. And suddenly employees are allowed to work from home without direct supervision.
Covid-19 shows that, as soon as there is a strong enough stimulus, things can change. This leads to remarkable innovations. Not being allowed to open their doors, restaurants, for example, are shifting to delivery mode. And schools suddenly do much of the teaching and even some of the testing online. This brings the opportunity to create innovations now that can be maintained after the crisis. And it also can help to keep the current speed and innovation mode afterwards.
Opportunity 4: Better meetings
As referred to in an earlier article, people spend up to 23 hours per week in meetings, half of which are considered a failure or waste of time. The current crisis has forced us to rethink how we deal with meetings. Because in many countries it is not allowed anymore to meet with a group of persons, many meetings are cancelled. And when they still take place they are mostly virtual and shorter.
As such, it provides an excellent opportunity for resolving one of the most disliked parts of organizational life. The technology for this is already present and mature for a couple of years, but the coronavirus triggers a sudden need for it. The real opportunity here is to make systematic changes so that meetings will be more effective, also after the crisis.
Opportunity 5: Reconnect and help
Challenging times offer a great opportunity for social bonding and other ways of connecting to and helping people. Of course, not being able to visit friends or family has increased isolation and feelings of loneliness in some cases. But the feeling of “we’re in this together” has also triggered interesting ways of connecting. Some of those have gone viral—such as Italians singing together from their windows and balconies—but there are many small, local initiatives too to connect and help people who need it.
In the individualized societies many of us live in, this provides opportunities to reconnect and create more social coherence. Not only during the crisis, but also afterwards. This opportunity comes with a big caveat though. Parallel to these nice initiatives we also witness how far people go to protect themselves and their families. People hoard food, medicine, toilet paper and guns without thinking a second of others. However, while it triggers self-serving egocentric behavior too, the Covid-19 crisis does provide us the opportunity to reconnect and show our social side.
Opportunity 6: Cleaner environment
The virus caused a shutdown or dramatical decrease of industrial activities. Factories are closed or operate far below their capacity, road traffic has reduced radically and air traffic collapsed, and the lack of tourism has emptied the streets in overcrowded cities like Venice, Amsterdam and New York. While this may be bad news for most people and especially those working in the affected industries, this is also good news for our planet. Covid-19 causes a significant reduction in green house gasses and other air, water and land polluting outputs. In Venice this has allegedly led to dolphins return after just a couple of weeks (although some argued this to be a hoax).
Whether the particular example is a hoax or not is not so relevant. The fact is that the shutdown and lockdown of large parts of our economy is good for nature—at least on the short term. The opportunity this provides, is to keep parts of this in place also after the crisis to make long-term improvements. Along the line of the previous opportunities, the current crisis provides us an opportunity to reconsider our lives and reorganize it in a way that has less impact on our planet.
Opportunity 7: Modesty and acceptance
The final opportunity that the Covid-19 crisis offers, is a chance to create awareness for the moderate role we play on this planet and accept that things cannot always go as we want them to go. The Covid-19 pandemic is a global crisis chat is unprecedented in modern peace time. We had other pandemics like SARS, but their impact was less substantial. And we had the 1973 oil crisis, but that was a man-made crisis. The coronavirus is not man-made and yet disrupts lives across the planet.
As such, the virus shows us that, no matter how well-planned and organized we are and no matter how much we live in the Anthropocene—the era characterized by significant human impact—we are not in control. One simple virus is disrupting everything. This offers a great opportunity. In almost every aspect of life we want to be in control. Whether it is health, airline safety or our calendars, we live in the illusion that full control is possible. The virus can help us create awareness that this is not the case. It provides an opportunity to take a more modest role and accept that many things are simply beyond our control.
Once again, the Covid-19 crisis has a large dark side. But as these seven opportunities show, it has positive sides as well. Since all seven opportunities require a quite fundamental change in how we approach the world, seizing them can take substantial time. In that sense, and if we keep on looking at the brighter sides of life, the longer the crisis lasts, the larger the opportunities are and the bigger the chances are of actually making changes to our deeply rooted habits and convictions. Follow me on Twitter or LinkedIn. Check out my website or some of my other work here.
I help companies do strategy through training, mentoring and consulting. My drive is to bring you and your organization to the next level with strategy approaches that work. I wrote “Strategy Consulting,” “Nor More Bananas,” and “The Strategy Handbook.” Reach out to me via jeroenkraaijenbrink.com, LinkedIn or jk@kraaijenbrink.com
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Pat Flynn 282K subscribers 26 million Americans are without a job right now, and that’s just in the U.S. alone. It’s a terrible situation, one that I’m all too familiar with myself having gotten laid off during the recession in 2008. These are tough times, but there are opportunities within them, too. I was able to build a business back in 2008 as a result of getting laid off, and I imagine that those who focus on the future, and the ability to create something new now, are the ones who are going to come out of this dire situation best.
A woman is sitting on the floor looking at bills and receipts. Photo: © David Sacks / Digital Vision / Getty Images
Once you have a handle on your debt and your income, you can calculate your Debt to Income ratio (DTI). This ratio tells you how much of your income is going toward debt payments. To find yours, divide your debt payments by your income, and multiply by 100. For example, $1,200 of monthly debt divided by $3,000 of monthly income is 0.4 x 100 = 40%. The lower this number is, the better, and tracking it can help you understand your finances more clearly.
A budget can help you stay out of debt, and it can help you climb out. It allows you to see how much money you earn and where that money is going. Create a bare-bones budget that allows you to pay for necessities like your rent or mortgage and utilities. Set aside everything else to pay off your debt as quickly as possible.
While you’re working on paying down debt, stop using credit cards. Start carrying cash instead. Stick to the budget you created and only buy what you can pay for with cash.
Build an Emergency Fund to Fall Back On
What is debt consolidation?
Pat Flynn
ksusentinel.com – February 16[…] Analysis of COVID-19 Impact & Post Pandemic Opportunities in Extreme Sports Travel Insurance Market: The episode of COVID-19 has brought along a worldwid […]N/A