"It's hard for the modern generation to understand Thoreau, who lived beside a pond but didn't own water skis or a snorkel."Bill Vaughn
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Consolidate A Credit Card To Reduce Your Debt
Strange though it may sound a credit card can be a useful tool in controlling debt. The properly chosen credit card can, in fact, be used to consolidate debt. There are several features to look for though if you plan to use a credit card in this ...
Refinance & Mortgage Tips: Down Payment From Stocks & Bonds
Once you've figured out how much of a down payment you can make on your home mortgage, it's time to determine how to document the source of your funds for the down payment and closing costs. Now you might be saying, "Why do they care where I get ...
What is Debt Consolidation?
Here is a useful guide to what is Debt consolidation. For some people with credit problems debt consolidation may be an answer. Debt consolidation is borrowing enough money from one lender to pay off all your debts. When you consolidate: You make only one ...
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Most people tend to ignore their financial situation until it becomes a huge problem. Realizing that they are in trouble, most often they turn to others for a solution to their situation.
More often than not, they look for help at debt consolidation companies which in my humble opinion just worsens their situation. When you realize that you are in trouble financially, there are a few things that you can do yourself to help ease the situation.
The first step is to take action. Do not procrastinate or try to hide from your problems - it is like a weed garden out of control - eventually it will be too much for you to handle.
Understandably, some people feel so burdened with debt that they simply cannot get their financial situation under control. However, there is no need to be depressed or discouraged about your situation.
You CAN do something about it if you are serious about getting out of debt. It doesn't matter how terrible things may seem - with a bit of planning your debt woes can be solved.
A five point plant for solving debt problems
No matter how depressing your financial situation may seem, there are steps that you can implement to improve the situation.
Lets look at 5 things you can start doing immediately to ease your debt problems.
1. Do not make any more debt.
The very first step towards solving one's debt problems is not to make any more debt. It sounds simple but it is a principle that is often ignored. The point is, if you stop making debt your monthly living expenses will be reduced. You will also be saving on interest because any money you owe on naturally has an interest amount attached to it that has to be paid back.
Another thing is that if you stop making new debts, you will have more money to pay off your old debts faster. You cannot build wealth if all of your income goes out towards paying debts.
Whatever you do, do not make the mistake of borrowing money to pay off old debt. The borrowed money will also have interest that will have to be paid off, you will have another long period of having to pay off your newest debt and by doing this you will just be creating a cycle of never ending debt payments!
No matter how painful it might seem, only by refusing to incure new debt will you eventually be able to accumulate enough money to pay off your existing debts.
2. Negiotiate with your creditors.
So you have people knocking at your door night and day looking for money that you owe them...
Instead of sticking your head in the sand, face up to your problem and contact each and every person that you owe money to. Rather than not paying anybody, or picking a name out of hat, you could try and negotiate with your creditors to pay a smaller amount every month for a longer period until you have paid off the full amount. Most creditors would rather receive a reduced payment than no payment at all.
Do not ignore your money problems, be proactive about it.
Having debt problems is nothing to be ashamed of, most people find themselves in a situation like that at least once in their lives.
The difference lies in what one chooses to do about it.
3. Selling assets
If you have any assets that you can dispose of to reduce your debts and ease your money worries you should do so. It is better to have just one car than to have two, not being able to pay your debt and eventually maybe losing your house.
If you have your grandmother's diamond ring stuck in a vault somewhere, sell it. Yeah, I know it has sentimental value but sentimental value does not put food on the table. Sometimes one just have to differentiate between what is essential and what is not.
If you own a house, why not rent it out and move to a smaller place in the interim. Do you really need to worry about keeping up with the Jones'? You can always move back once you have settled your debt.
There are many ways that you can solve your money worries. Assess your own unique situation and see what you can change to help you in your effort to get rid of bad debt.
4. Change your lifestyle
Harsh as it may sound, if you really want to get out of debt, you will have to look at what expenses you can cut out on.
Stop eating take away food - it is bad for you anyway. Stop buying weekly magazines. Do you really need that chocolate bar every time you go shopping? Pack your own lunch for work. Walk to work if you don't live to far away instead of taking your car or a bus.
Instead of buying the most expensive box of biscuits, settle for a cheaper one. Switch off the lights when you leave a room.
Most of all, try and set up a monthly budget and stick to it.
5. Increase your income If you can, try and find a part-time job to help earn extra money.
If you know anything about the internet, try and put up a website to sell something or earn money with Adsense.
There are many options available if one really looks around.
If you sincerely cannot find a way to increase your income, it is imperative that you implement the other 4 steps mentioned above.
In closing
It is absolutely not necessary to approach any debt consolidation companies to help you get out of debt if you are prepared to just do a little work. If you do it yourself you will get out of debt much sooner than if you try and do it through a debt negotiation or debt consolidation company.
It is better to cut down on expenses and to negotiate with your creditors in good time. Don't wait too long to do something about your debt problems or you could find yourself being declared insolvent and losing everything you own.
Getting out of debt may take you a while, but at the end of the day it will be worth your while. You will probably be able to do it without having to spend several years paying off extra debt if you use the services of a debt consolidation company.
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