Storage lockers: Stuff to save and sell
June 30, 2008
I did not realize how much is going on in the lives of many Americans regarding storage lockers. Not that I necessarily should have been thinking about storage lockers.
For a short time I rented a storage locker to house my possessions. The lease on one apartment was up. I was planning on moving out of the area and didn’t want to renew, so I temporarily moved back in with my parents. Once I got a new job and apartment I got my stuff and stopped paying for storage.
I had assumed this was how storage worked for most people. You’re in some sort of transition and need a temporary place to keep your essential possessions.
Apparently this isn’t always the case.
There are people out there who are paying for storage simply because they have so much “stuff” that they don’t know what to do with it all. I know one of these people. He’s in his 30s and hanging on to toys and art projects from elementary school — along with a ton of other stuff he’s collected over the years. Most of it could go to the Goodwill or the trash bin.
M.P. Dunleavy addresses this topic in her latest article. It’s interesting to look at some of the numbers she cites as far as how much the storage locker business has expanded in the past couple of decades. It seems apparent that many of us simply have too much stuff.
(I will admit that I have too much stuff, and I’m trying to reduce the amount of unnecessary things I’m cramming into my home. I’m also not spending money every month just to store my things, which is important to note in these tough economic times.)
Having too much isn’t the only reason people are turning to storage.
A while ago I wrote about people selling their possessions in order to pay the bills and put gas in their cars. Yet another trend is emerging from the subprime mortgage meltdown and all-around tougher financial times: Storage auctions.
The New York Times ran this story about the increasing frequency of auctions at storage facilities. The auctions are held by the facility after the unit’s renter is delinquent on his or her payments for a certain period of time.
Bidders get barely a glimpse into the storage unit before they place their bids. Only after someone wins the bid do they get to find out exactly what’s inside.
For people who put their items into storage after a foreclosure, I would imagine it would be particularly difficult to see what amounts to nearly all of your possessions auctioned off, often for a minimal price.
Some people have even been found illegally living in their self-storage units after losing their homes.
On the flip side, some people are turning another’s misfortune into profit. Many bidders wade through their new items and resell them at flea markets or on online auction sites.
Do you pay every month to store “stuff?” What do you think about self-storage auctions? Have you ever attended this type of an auction? Have you ever had your possessions sold?
Deal with your debt
June 18, 2008
I think most people would agree that there is a stigma attached to debt and spending problems.
People hide their debt from friends, co-workers, even family and spouses. It’s embarrassing to admit that you mismanaged your finances. But I have a theory: Hiding debt in some cases only adds to the problem.
The only way to reduce debt is to get on a spending plan and stick with it. Many times it can be a pretty restrictive plan that doesn’t leave a lot of room for “play” money.
If you are too afraid to tell your friends you can’t afford something and try to keep up with them, you’re going to quickly derail your budget.
I’ll use myself as an example. In my younger days I accumulated some debt. There was a combination of factors that led to my increasing credit card bills. But, one way that I continued to keep myself from getting ahead was trying to keep up a busy social (and therefore spending) life with my friends.
I was too embarrassed to say, “You know what, I can’t afford to go out tonight.” Or, “I really can’t afford a restaurant that expensive.”
Instead I would fork over the plastic and go out, all the while knowing I should be sitting at home.
Several years ago I realized that I had to do better with my money or I was going to be headed for some serious trouble. I took control of my financial situation and started making better choices.
I also started fessing up when I just didn’t have the money to do something. I was surprised to find out that I had other friends in the same situation or friends who understood.
The first time I bailed out on plans, I sent a text to my friend that said, “I’ve got to pass. I literally have like $15 to my name until payday.” I felt pathetic.
He responded with: “I’ve been there … I’ve been there.”
It was such a relief to read that simple message.
I recently read in a Wall Street Journal article that 11.8 million bank credit cards are delinquent. While it is a relief to know you’re not alone, I don’t find that number any kind of relief. It means there are a lot of people who need to take control of their finances.
That’s the important thing for those struggling under the weight of debt: Take responsibility and get help. Call a non-profit credit counseling agency, like Advantage CCS, and go through a comprehensive credit counseling session with a certified counselor. The counselor should help you create a budget and an action plan to help you manage your finances and reduce your debt.
Debt is not a problem that will go away if you ignore it, but you can take steps to better your situation.
Improve your credit score the right way
June 4, 2008
I’ve already covered why it’s important to have a good credit score. Now I’d like to address how to improve your credit score.
The very first thing to do is get a copy of your credit report if you haven’t already done so. You can do this by visiting www.annualcreditreport.com.
Make sure there are no errors on your credit report. If you see anything that is an error, get it corrected. Errors could include something as minor as an incorrect address that probably won’t impact your credit score, or could be something as major as a case of identity theft where someone used your name to open up new credit. You will see instructions on the web site to tell you how to go about getting an error corrected.
The next, and one of the most important steps, is to pay everything on time. I repeat, pay everything on time!
Also if you have any accounts, especially a revolving account like a credit card with a high balance, pay it down. Part of your credit score is determined by how much credit you have available and how much you are using. If you have a credit card with a limit of $10,000 and you are using $8,000 of that balance, it doesn’t look so good. You should aim for using roughly 30 percent or less of your available credit.
If you have a credit card with a good history that you’ve paid off, don’t cancel it. Go ahead and cut it up and don’t use it again, but don’t cancel it. It is important to retain accounts that you have paid on time to establish and keep your credit history. And, cancelling the account will also reduce your available amount of credit compared to how much you’ve used.
Please note: You should not go out and open new accounts just to increase your available amount of credit. Suddenly opening a bunch of new accounts could adversely affect your score.
Another important issue regarding credit reports and scores is that of companies that claim to do “credit repair.” No one can “fix” your credit report if it is accurate. The only way to improve your credit score is by paying your bills on time, paying down your debt and achieving a healthy blend of secured and unsecured debt.
If there are errors on your credit report, most often you can have the errors corrected on your own. You don’t need to pay a company to correct it for you.
Check out www.myfico.com for even more information about credit scores.
What does your credit score mean?
June 2, 2008
We strive to achieve many things in our adults lives — a high paying job that we also love, a nice home, financial security for ourselves and our families, and of course a high credit score.
I place a good credit score on the same level of importance as those other things because that is actually the key to helping you achieve some of those other goals. But, I wonder how many people are actually working toward a higher credit score.
Credit scores — sometimes referred to as FICO scores because of Fair Isaacs Company which created the scoring system — range between 300 and 850. Different lenders may gauge what is a “good” credit score different. In general, however, credit scores above 720 are considered good while scores in the 760 and higher range are considered very good. The higher your credit score, the better chance you have of not only getting a loan, but getting a good interest rate. Lenders use your credit score to determine your credit worthiness.
Your credit score is calculated based on the information contained in your credit report. Some things that factor in to your credit score are:
· Payment history. Do you have any late payments or delinquent accounts?
· How much you owe. How many credit accounts do you have, and what are the balances on those accounts?
· Length of credit history. Your credit score will increase with a good, established credit history.
· New credit. Simply put, are you taking out new debt? This could be unfavorable to a lender, depending on each person’s unique situation and credit history.
· Types of credit. Do you have a lot of revolving debt, like credit cards, or installment loans, like a car loan. In general, lenders prefer to see a healthy mix of the various types of debt.
If you think your credit score isn’t that important, consider this example (provided by myfico.com and published in the Akron Beacon Journal):
A credit score of 680 might qualify you to borrow $200,000 over 30 years at an annual rate of 6.029 percent. At that interest rate, your monthly mortgage payment would be $1,203.
Now say your credit score had been in the 760 to 850 group, your interest rate would have been 5.521 percent, and your monthly mortgage payment would have been $1,138.
Maybe $65 doesn’t sound like much of a savings to you. But, multiply that $65 over the 30-year life of the loan and that adds up to an additional $23,400 you just paid for your home because of your credit score.
Keep reading, and I’ll tell you how to improve your credit score.
Check out www.myfico.com for even more information about credit scores.
Remember you are entitled to a free copy of your credit report from each of the credit reporting bureaus (Experian, Equifax and TransUnion) each year, but you do have to pay for your credit score. You can get your free credit report and purchase your credit score at www.annualcreditreport.com.
Review and renew your financial goals
May 12, 2008
It’s never too late to keep your New Year’s resolution.
Let’s face it, a lot of us probably made promises to ourselves around Jan. 1. If you did make a promise to better manage your money, have you kept it? If not, it’s time to review and renew your financial goals.
Here at Advantage CCS, we encourage consumers to look to credit counseling as the start to improve budget management and reduce debt.
A credit counseling session should give you your overall financial picture. A certified counselor will review your financial situation including the amount of income you have versus the amount of expenditures you have. The counselor will also look at your debts to determine whether they are secured or unsecured debts and what the interest rates are on those debts.
At the end of the session, the counselor will make recommendations that should help you pay down your debts and better manage your finances.
At Advantage CCS there is no charge to go through a credit counseling session.
There are many types of debt relief out there including Debt Management Plans, debt consolidation loans and debt settlement.
Which form of debt relief is the right one for you depends entirely upon your individual circumstances. If you are looking for a way to lower your debt, it is crucial that you educate yourself about the different debt relief options. Make sure you understand all of the positive and negatives of each option.
However, start with credit counseling. A reputable agency should not force you into a Debt Management Plan and should offer counseling and education regardless of whether or not you choose to enroll in their plan.
Participating in a credit counseling session will not stop you from exploring the other debt relief options. What it will do is give you a good idea of where you stand financially, which is the first step when exploring ways to reduce your debt.
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Recent Posts
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- Storage lockers: Stuff to save and sell
- Pets feel the pinch of foreclosure
- Beware of promises to repair your credit
- Watch out for delivery surcharges
- Reduce discretionary spending in your budget
- Deal with your debt
- Don’t try to keep government money sent by mistake
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