Here’s a list of the blog carnivals from that past week with some of the most interesting content on debt and other personal finance issues:

Carnival of Debt Reduction

Bankruptcy and Debt Carnival

Carnival of Twenty Something Finance

Rich Life Carnival

Carnival of Road to Financial Independence

Carnival of Everything Money

Carnival of Wealth, Money, and Life

Personal Finance News Carnival

Raj Patel writes for DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs.  DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.

“UNBROKE,” the television special on ABC, just aired. The one-hour program was designed to reach out to Americans and explain some basic economics concepts, stocks, bonds, 401(k)s, and debt. On the whole, the program was good as a primer to get people motivated to get up and do something about their financial problems. The trouble is, though, the advice they give doesn’t always pass muster. If you caught the show, here’s some of the content seen through the “DebtGoal” filter:

• The UNBROKE host tells the audience to think about housing as an investment. Really? Calling housing an investment would be slightly more compelling if there was guaranteed income to swing mortgage payments, but in our current economic environment, income insecurity is a major factor in the risk part of the home ownership equation. Housing historically hasn’t even been the top competitor with other forms of investment, all corollary costs of ownership included. It is much more accurate and helpful to treat housing as an expense in one’s budget.
• The UNBROKE host makes an unforgettable quip about retirement: counting on social security checks alone to fund one’s retirement places them at the poverty income level.
• And Seth Green? Lots of entertainment, but little commentary on the specifics to his decision-making process on the right moment to buy a home, invest for retirement, or money management. The best part of his presentation is his admitted modesty when it comes to housing.

My most glaring issue with the presentation is that they encourage a target audience that may carry substantial non-mortgage, non-educational debt, like balances on their credit cards, to invest in stocks right now. This is hands down a bad idea: credit card debt, auto debt, and any other high interest loans should be prioritized for elimination before investing in the stock market, especially in a non-retirement account for which there is no immediate or future tax advantage or matching employer contribution. This is not to say that one should liquidate one’s existing retirement accounts — an action that comes with penalties — but rather completely stop making additional contributions to retirement and non-retirement investment accounts and instead funnel cash into high interest debt reduction as soon as possible. This advice holds even for those who are at high risk of defaulting on their mortgage — the potential gain from buying stocks and bonds right now is unlikely to be justified when faced with the foreclosure and loss of one’s home.

Raj Patel writes for DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs.  DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.

Henry Blodget on The Business Insider points to economic data and mentions that the worse of this recession may be over for the American economy. Specifically, he suggests that contraction of real GDP at annualized rates of 6.3 and 6.1% in the fourth quarter of 2008 and the first quarter of 2009 mark troughs in the crisis. Should those with debt breathe easier? A reduction in household net worth and a plunge of the worth relative to debt are reasons to be extremely cautious. These factors can dampen prospects for economic growth moving forward, thus exacerbating even personal debt problems that may appear temporary at the moment. Even the notion of housing as a “sure bet” for one’s long-term investments is being called into question these days, and rightly so. So what is a sure way to get back on track?

Reducing expenses will be key. Reduced costs in turn decrease the debt pain experienced from costly, unexpected emergencies; they minimize the negative consequences from job/income insecurity; and they free up cash for debt reduction. To efficiently reduce expenses, consider setting up a budget, separating discretionary from non-discretionary costs. Also, track debt using a simple form, making sure to check levels and progress periodically.

Raj Patel writes for DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs.  DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.

A few weeks ago the federal government inaugurated a new website that helps homeowners understand more clearly their options with government programs to help refinance or otherwise restructure their mortgages. A number of programs exist. Eligibility varies, but the website provides a quick questionnaire to help gauge if you qualify. Mindful of the fact that not everyone who qualifies, nor even all who struggle with debt, should opt for a refinancing scheme, the website:

• points consumers to HUD-approved financial counselors
• provides a helpful yet basic checklist of what to know about your mortgage and other personal financial information. This list of data will be important to know when evaluating any course of action on your mortgage, not just when looking to refinance.
• suggests prominent warning signs of foreclosure fraud/scams.

With all of the information provided on the site, it is important to consider how a mortgage choice will impact your overall personal debt level, or indirectly make paying off debt more complicated. One example of this is the referral service to financial counselors. Make sure that using one of these financial counselors will not negatively impact your credit report, unless you decide that getting advice through this avenue is more important than protecting your score.

Raj Patel writes for DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs.  DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.

NPR tackled the new credit card bill that the president signed recently, pointing to its basis in the controversial field of behavioral economics. Basically, the idea is that, irrespective of how rational the option is, you’re more likely to choose something if it is presented to you first, or if you’re placed in the situation in which you have to spend more effort to not opt for a particular course of action.

For the new policy on credit card companies, this all means more information on the dangers of revolving debt, presented to cardholders upfront, and in bold. One such change will be a listing on each credit card statement identifying how long it will take to pay off a debt if just the minimum payment is made. But more concrete rules will constrict credit card companies: some types of fees are outright banned, some uses of data on a cardholder that’s peripheral to the lender-debtor relationship will be disallowed, and more advanced notice on changes to interest rates will be required for consumers.

Some consumer groups and anti-credit card activists are shouting “mission accomplished,” but those with debt will still need to equip themselves with the best possible tools to get out of the red. Why?

Credit card companies, as organizations that seek to maximize their profits, essentially fit the pool of eligible consumers for their product – the target – into a game with constraints. The federal government has changed the constraints, but the constraints haven’t disappeared, i.e., they can still indebt a cardholder. The change in the rules to this game force lenders to change their policies on different groups of cardholders because they need to manage the overall risk associated due to their total pool of customers. The financial pain will simply move to another location. Think, one type of fee banned, another type created, or another existing type of fee doubled. Interest rate hikes limited now? Well, then cardholders will just have to start off their relationship with the lender in the first place at a high interest rate, nearly double or more than what was offered in the deregulated years since the 1980s.

In short, those with credit card debt should not celebrate the changes. They will mark a step in the right direction towards an environment more favorable for the consumer, but now as in the coming months and years, those with credit card debt will need the best debt management tools and knowledge they can find to eliminate debt once and for all.

Raj Patel writes for DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs.  DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.