• Jeff Michael: Repair Your Credit and Knock Out Your Debt

    Jeff Michael: Repair Your Credit and Knock Out Your Debt
    I highly recommend this book because I wrote it.

  • Edie Milligan: Tips from the Top: Targeted Advice from America's Top Money Minds

    Edie Milligan: Tips from the Top: Targeted Advice from America's Top Money Minds
    I have about a dozen entries in this book.

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Our reward for finishing our DMP is a n extra pile of cash we're not throwing at credit cards every month. We're going to nail our car payment, and have a BIGGER pile of cash every month. Start in on the home equity payment, etc etc etc. Every bill we pay off makes the others go away faster. That feels really good.

The lessons learned from a DMP can be extremely valuable, if you are ready to observe and learn. For many that are not ready, actually for the majority, a DMP fails because the pain of sacrifice is too intense. A chronic mistake people make afterwards is avoiding credit. Without new, good credit, you can't improve your score. Credit in moderation, like cheesecake, is good and OK.

I agree that DMP can be extremely valuable. The budgeting and money management skills are the key to making good decsions after DMP (as long as you have the discipline). What I find still lacking from DMP is getting folks to understand the fundamental principle of Opportunity Cost. Until they know and understand the true costs and impacts of their decisions, they are at risk of slipping ... or suddenly getting stupid. Not knowing opportunity cost breeds a false sense of financial optimism.
(Unfortunately, I see it daily)

Paul Solutions for a Debt Free Life

Keeping a couple of credit cards and using them for groceries and gas and paying them off every month is good for mainting and building your credit. After 6 months of no use, your credit card with a zero balance can go inactive to the bureaus, and then you can actually see your score go down. Credit payment history is 10-15% of your score. Letting the credit card hit $0 and not using it again can hurt you. So gas up the tank or go get your groceries and maintain or build your score.
And as the article points out, getting out of debt is essential, but so is working on your retirement next. It's critical if you want to retire and not have to continue working.

A DMP can be very valuable. Self control is definately a big part of any DMP. Once a DMP program is completed your credit can be re-built with any exsisting car loans or a mortgage payments. With the right DMP you can even learn how to get these kinds of loans paid off early.

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