• Lower your monthly payments
  • Reduce stress and live your life
  • Avoid personal bankruptcy court

What You Need To Know About Credit Repair Services

There has been a massive increase in the number of companies offering credit repair services. The firms that offer these credit repair facilities claim they can get instant results for a fee so we decided to get the straight facts for you. Based on our cursory review it seems the FTC (Federal Trade Commission) and credit reporting agencies frown upon these credit repair services so let’s find out why shall we? For the sake of convenience we are going to provide some points and then elaborate on them below.

  • What Is Credit Repair And Why Do People Need It
  • How Much Does These Credit Repair Facilities Cost?
  • Effectiveness Of These Credit Repair Services
  • Food For Thought

What Is Credit Repair Services And Why Do People Need It?

In a nutshell credit repair services is when a consumer hires a company to have negative data removed from the consumer’s credit report.  The legal term for these companies is “credit repair organizations” and they are regulated by federal law on what they can advertise and communicate to the public. These federal laws are necessary to protect consumers from deceptive marketing practices.

When a person hires one of these companies they will look at all of negative information on the consumer’s credit report and file dispute letters. By law the credit reporting agency must note that these negative files on the credit report are “in dispute” so it will not damage your credit score. While “in dispute” the creditors who made the claim has 30 days to provide documentation to proof their claim but most of these creditors fail to respond to the dispute. Once the 30 days has expired the negative credit details are removed from the report.

credit repair services

Cost for Using These Credit Repair Services

There are three (3) billing formats being used by these credit repair firms, each format has its own distinctive benefits and features.

  1. Subscription Model – The credit repair service provider will bill their clients every 30 days for the work being provided, these fees can vary but never draw the conclusion that higher fees mean better results.
  2. One Time/Flat Fee – The credit repair service provide will charge a one-time fee for their services.
  3. Pay Per Action/Deletion – The client only pays for each successful deletion. One of the benefits of this is the client is paying for results and since it is illegal for these credit repair service providers to ask for payment in advance it keeps things legally compliant. The only disadvantage is if an individual has a large number of negative items in their report.

Does Credit Repair Services Work?

It depends on who you ask, there are reports of these companies helping consumers get inaccurate information removed from the credit reports of unsuspecting consumers but the services being offered by these credit repair agencies are not proprietary, You could do this work yourself for free if you wanted to so you have to ask yourself whether it is worth your time to do it yourself or hire someone else.

Argument against the Use of Credit Repair Service Providers

The FTC and various consumer advocacy groups consider these credit repair services as scams and tell consumers to not use these services. The FTC is using two reasons to justify this approach:

  • You Could Be Breaking The Law – It is illegal to file a dispute on a credit report when you know the debt is legitimate and you are just trying to “trick the system”. There are some credit repair service providers that get clients to sign up for a new SSN to create a new credit report which is completely illegal ad dishonest to say the least. So remember if the debt on the credit report is valid meaning the consumer is aware of it then they cannot in good conscience dispute it.
  • You Can Do Your Own Credit Repair For Free – As mentioned earlier you can do your own credit repair, just get a free copy of your credit report and look it over for errors. When you have the errors identified you can write to the credit reporting agency and dispute the error yourself. By law the credit reporting agency will need to contact you with 30 days with proof of the debt or remove the delinquent account. So why would a person pay some company a considerable amount of money for something they could easily do on their own?

Food For Thought:

There is a large number of consumer complaints posted online from consumers who were ripped off by deceptive credit repair service providers. If you have credit problems and want to deal with them properly you should tackle them head-on and take care of it yourself. There are no short-cuts when it comes to having a good credit report but taking proactive steps now will help you rebuild your good name.

Great tips for a Debt-Free Lifestyle!

Although some people believe that their debt issues will get better on their own, they will not. Taking care of your financial life is each person’s responsibility and if you are having any kind of financial issue you are the only one who will be able to get a grip and solve it. Of course getting professional help is an option, however the change should begin on how you deal with money and how others do it. Your financial life depends on you, so why don’t you give it some great attention?

Debt-Free Lifestyle

How to actually get rid of debt?

Some people might find a Debt-Free Lifestyle hard to achieve, however it is not! The first step on the whole process is to pay attention to a few tips that will be extremely useful for you!

Save as much money as possible, if needed get a second job

Leading a debt-free lifestyle might be hard, especially if you already have debts to get rid of. In case that is what is happening to you, make sure you pay the debts as soon as you possibly can because this is the only way for you to achieve your goal. If you do not have enough money to pay the debts every month consider getting a second job and also save as much money as possible on a daily basis. Cut as many unnecessary expenses and have your goal in mind 24 hours a day and 7 days a week.

Try to make money out of things you no longer need

Creating an account on Kijiji, eBay or even Amazon does not mean you will be up to spending money, in fact it is a wonderful way to do the other way around: earn cash! Every person has some stuff home that they no longer need, why not make some good cash out of it? Cash that can be put towards your debts and that can help you exactly the way you need?

If you have multiple debts…

In order to achieve your debt-free lifestyle goal as soon as possible you should get rid of your debts as soon as possible, we all know that, but what if you are dealing with multiple debts at the same time? What is best to do? Well, in this case the best option is to get a single loan and pay all debts off, that way you will only have to pay a single debt off and will be able to deal with better interest rates (and only one).

Work online, remotely

If you need extra money and you do not have enough time to work a third shift you should consider doing some freelance jobs online. It is always a great way to get some extra cash! You can also work in different jobs such as babysitting, taking care of dogs while your neighbor’s travel or even getting rid of your neighbor’s snow during winter. There is always a great way to make extra cash, it all depends on you!

Settle your debts whenever possible

If a debt-free lifestyle seems to be far away from you then what you need to do is try to settle your debts. There are several different bank companies and also stores that wish to receive the money in the best way (and fastest way) possible. Because of that they allow people that owe them to negotiate the debt and make payments with reduced interest to get rid of the debt faster.

Talk to a debt counselor

Several countries offer these services for free. In case you cannot figure out what your best options are, make sure you contact these professionals to help you out. There is no problem asking! In fact there are several professionals of this field that will be able to guide you through the whole process and will give you very useful tips on how you can keep up paying your debts.

What not to do when trying to lead a completely Debt-Free Lifestyle?

There are some slips when it comes to trying to save some money and getting rid of debts. There is thin line between actually doing it and getting deeper and deeper into the debt hole. For example, there are some people that get a loan to pay all of the debts off and end up spending part of the loan in other things such as paying current bills or even getting a TV of anything else. This is a very common mistake that should be avoided.

It is also important to try to get rid of the loans as soon as possible, after all a new loan will also charge interest (even if in smaller amounts). The faster you work towards your goal the faster you will be able to lead a much happier life rid of debts.

Year-End Tax Planning Is Something That We All Should Think About

Something that people are starting to find important is the year-end tax planning. Many people suggest that you focus your tax planning on specific areas. There are three that are most commonly used, deferring or accelerating your expenses or revenue and expiring tax provisions. Looking into these examples can help a person to find the best way to handle the year-end tax planning.

Year-End Tax Planning

Expenses

Another way to handle your year-end tax planning is through deferring or accelerating your expenses. It is commonly known that if you have more deductibles then you will have less income that is taxable. Many times, it is not smart to increase your expenses at the end of a year just to avoid some taxes.

The expenses cannot be just any expense; it can only be ones that are considered tax-deductible expenses. Some examples of tax-deductable expenses

  • Medical expenses
  • Charitable donations
  • Taxes (sales, state, local, and property, etc.)
  • Education
  • Mortgage interest
  • Childcare expenses
  • Job-related expenses

Accelerating these expenses is something that you should talk to a tax professional regarding. However, to accelerate your expenses is simply paying them before midnight on the 31st of December. Once you begin to accelerate your expenses you will need to do this from year to year.

Revenue

It is commonly known that the more income you have that is taxable the more taxes that you will end up paying. It can be weird for a person to think about decreasing their revenue. However, deferring your revenue to the next year can be helpful. Selling any taxable investments is something that you should hold off to do until the New Year.

  • It can be difficult for an employee that is salaried to decrease their revenue. Even though the employer has most of the ability regarding your revenue, you are able to ask the employer to hold your end of year bonus until January.
  • As a contracted employee or the owner of a small business, you have the ability hold off you invoices until the New Year. This can delay payment until the next year and ultimately reduce your revenue for the current year.
  • If you are in retirement, you could possibly have the ability to stop taking your withdrawals until the beginning of the New Year.

There is something important to remember when your year-end tax planning begins to fall into place. Like expenses, if you defer revenue you will need to continue to defer revenue every year. If you do not then you will find yourself in a situation where you will have revenue for 13 months in one year.

Expiring Provisions

The last way that you can help your year-end tax planning is through expiring provisions. Expiring provisions can sometimes entice individuals to use them similar to those last items on the shelf for sale. This is a way of encouraging taxpayers to act when it comes to those provisions.

There are so many things that can be talked about regarding this subject. There are many tax rate changes that could be looked at, just like those from the last year. There are changes in what is considered income, limits, deductions, and credits. These are things that change every year and sometimes they do.

  • It can be exhausting to type all of the expiring tax provisions. However, the Joint Committee on Taxation has an expiring provisions page that can be very helpful.
  • One of the things that will change the most is for an individual is the re-inclusion of income. This can mean that for those people who wish to do a short sale that this is the year to do it. You will not have to pay any taxes on the debt that is forgiven.

It can be important that a person should look into expiring provisions during your year-end tax planning.

Taking Action

No matter what you decide to do for yourself in regards to the year-end tax planning talk to a tax professional to make sure that you are doing what is best for your situation. Three important areas not to forget about when looking into your taxes are expenses, revenue, as well as expiring provisions.

Asking yourself a few questions can help you to decide which way you should steer your year-end tax planning.

  • Is it possible to defer or accelerate your revenue? Is it beneficial with your current situation?
  • Will it be beneficial for you to defer or accelerate your expenses? Is this option even possible in your current situation?
  • With all of the expiring tax provisions, are there any that you can take advantage of?

Knowing the answers to these questions can help you to decide if expenses, revenue, or tax provisions are the best way.

Research before Investing in P2P Loans

People today are learning about a new way to borrow or lend money online. Investing in P2P loans or Peer to Peer lending is to help people to investor without hurting their credit score. The online websites still provide consumers with the same coded security and privacy that banks have with online banking. The consumer is able to diversify their current income and receive profitable returns similar to having a stock portfolio.

Investing in P2P Loans

People who are interested in this type of investing of money will need to take time to research all the pros and cons to see if it is what they to reach a financial goal. Consumers in North America will find that credit borrowers and loaner that want to build a financial portfolio. The information below is there to help in your research and make conscious decisions on financial planning.

Credit Rating: Does It Matter?

A person’s credit rating is important but is not the only thing used to guarantee a payment. The people who are interested in investing in P2P loans will be based on individual basis on what the loan was used for when it was issued along with the financial history.  A main reason people can receive this P2P loan the funds from a network of people in businesses, the private sector along several financial firms. These loans were to provide consumers a way to consolidate loans with a comparable interest rate that was affordable for the public sector.

However a person that has a high credit score may seem to be the one individual that might invest in a peer to peer loan or P2P but not receive it simply because they are not reliable with any payments.  So when it comes to investing in 2P2 loans people should look on the websites that offer signups for new investors and the Better Business Bureau.

Returns Can Be Reinvested Into Other Accounts

Since this a loan, you and others may wonder how the borrowers can receive any returns.  This is where it is similar to shares bought and sold in companies that participate on the stock market. The reinvesting would be used in a portfolio especially for people that are reaching their late 50’s and early 60’s. This way the borrow could make lower payments each month and reinvest into an IRA so they can receive a return. The person who borrows money would have considerable advantage of using these compound earnings to see a financial growth for the future. This would benefit their financial portfolio along with tax advantages not just in a traditional style IRA but in a Roth IRA.

People who live in the United States and Canada will find that having an account that allows tax deductions a financial strategy. However people need to remember that the P2P loans are taxed in the United States and Canada at a marginal rate.

You May Ask Who the Lenders Are.

The competitions of online and traditional financial firms have increased because of the availability of the notes that are being bought by individuals.  So why are people afraid to invest or reinvest in loans that use notes. This is simply no one likes to lose money especially people who have a high net worth. Loans of any type along the process of buying or selling stock can be a financial risk.

It is important to know all the risk and even reinvesting in P2P loans people still can default on the loan. The reason people are interested in the P2P loans and notes is a way assets can have some principal protection compared to the stock market. Presently finding the right assets to reinvest for growth can be difficult in this economy. People are trying to find the best yet with less risk for financial stability. They are hoping that this will help provide a better portfolio and when it does come to retirement it will help them. If you or others that are looking into this a form of income for the standard of living you will be disappointed.

The peer to peer loan or P2P is not income it is still a loan that individual’s can use to start a new business or use it for expensive merchandise. The loan is based on individual financial status and why they need the loan at any amount for the purchase. The reasons vary and the notes that are reinvested are to provide some financial stability that can be paid off in 2 to 7 years.

Consumers that use this plan of financial planning will need to be comfortable with the idea of not being able to get their money out. On the other hand if they place the notes into a traditional IRA or a Roth IRA there are specific age and governmental regulations that need to be followed especially y in the United States.

The Real Reasons You’ll Never Be Rich

You don’t need to have the highest paid job or to win big at bingo to become rich, it is possible that you can have this wealthy and live in a comfortable way if you follow some sensible financial advice. There are some reasons you’ll never be rich and you might be surprised at some of the ways that you can change your fortune around.

Reasons You’ll Never Be Rich

Making Changes

One of the easiest reasons to see is that you are spending too much of your income, you don’t need the latest gadgets each month to live a happy life. You need to make changes to the way that you budget your money. It is important that you can avoid the need of having your pay come in each week or month to be able to afford the next month’s living expenses, this is sometimes called living pay check to pay check and if you are budgeting in this way you are never going to become rich. This is the main reason you’ll never be rich.

The Changes Needed

If you want to avoid the negative connotation and want to remove the prediction that you can’t be rich then you need to learn how to stop living in the same ways as before. It is going to be difficult to change habits that you have developed but it is possible to change.

One main reason you’ll never be rich is so simple, you are spending too much money each and every month. If you are living beyond your means you are not alone, but if you want to be rich you need to cut back on the money that you haven’t got coming in because to use this money you will need to be paying interest, so you over spending increases to take into account of that interest payment that you will need to make.

You need to start looking at what you are spending your money on each month. Once you are aware of the areas that you money goes to you then need to consider the areas that you can cut back on, try writing out a budget and sticking to it. The idea being that at after you have budgeted you have money spare each month that you can use to save.

Saving Enough

If you want to avoid the reasons you’ll never be rich then you need to consider the amount that you are saving each month and the reason that you are saving this money. You need to put a large percentage of your money away, it is important that you consider the full implications of the money that you are saving, it is good to save for the next festive season, your next holiday but just as important is to save for your future. You need to have a minimum of 3 months money that will cover you in case your income is reduced. This money needs to be in a savings account that is instant access; it will ensure that there is sufficient money to live if you lost your job.

Having Too Much Debt

An obvious reason you’ll never be rich is if you owe too much money. Your creditors are making money on your spending habits, whether it is for a holiday or a new kitchen, it doesn’t matter if you have debt then you are not going to have the money which you can save and become wealthy.

You need to devise a plan to reduce the money that you owe so that the money that you have coming into the home is yours and not going to be making a beeline to your creditors pockets instead.

You might think that it is important to keep up with the latest items but in reality it is going to cost you more in interest payments. If you want an item, you are able to do something the old fashioned way and save for it. It might mean that you have to wait for the item, but you will quickly realize that there are times that you purchase an item that you don’t really need and can do without, and when you are saving for something you can quickly realize that it isn’t as important to have as you once thought.

To recap on the information above it is quickly evident on making chances can reduce the reasons you’ll never be rich.

  • Budgeting and getting the amount that you save higher each month
  • Reduce down your debt as quickly as possible to save on interest payments
  • Increase the savings that you have, and allocate them to different criteria.

Don’t give up on being able to be rich and know that you are free from living from pay check to pay check, but don’t give up working too early because retirement isn’t going to be great if you haven’t budgeted correctly for it.

Alternate Ways to Handle Student Loan Debt

Parent’s that have one or more children in college will have accumulated student loan debt. Furthermore if the child is placed on college suspension or graduating will owe on the average $30,000 in student loan debt.  In fact those graduating this year the debt may even be more simply because Congress was unable to reach a decision regarding the interest rates on government issued student loans.  The interest rates just doubled from the 3.4% to 6.8% for federal student aid which includes both subsidized and unsubsidized loans.

Handle Student Loan Debt

This of course does not apply to a child taking out or the parent signing a promissory note to obtain a loan through a financial institution. At the same time young adults between the ages of 19 to 28 have to worry about the professional job market. The job market for many of these college graduates will be bleak to say the least. Since they will be up against adults that have lost their job because of outsourcing or the business has foreclosed do to the economy. These adults have experience along with high education will most like get the job before the new graduate from college.

Of course if the bachelor degree is in the following fields of science, technology, medical, research, STEMS or mathematics then finding a job is slightly easier compared to other saturated fields. Unfortunately for these individual’s it might take months to years before they can find employment in their field of study. While the graduate is continuing to look for employment and still not working then how will they handle student loan debt?

Ways to Qualify for Repaying Student Loans

Consequently parents, graduates or young adults have two options when it comes to handling student loan debt and the interest of loans that equaling $30,000 or more. Parents and young adults struggling with student loan payments may qualify a deferment or make payments on the interest during forbearance. Many of the deferments are not done automatically so the individual would need to submit a request to the financial institution that services the loan. In addition the person would also need to contact the college or university financial aid office. If at any time the student is in college part-time, in grad school or a career/technical school, along with not being able to find full-time employment or unemployed are all ways a person may qualify for a deferment from the loan. Another way to have a student loan deferred if they have experience economic hardship do to being away for military service, natural disaster and being in the Peace Corps. There are several websites that have information available about getting a loan deferment. One of the websites that is important to check with at the beginning of each New Year is the Federal Financial Aid or FAFSA at the www.FAFSA.GOV.  The application should be completed no later than the first of March each year or as soon as all the prior year’s tax information is available to them.

Two Types of Forbearance

  • Mandatory is for students who do not qualify for a deferment.  However it can be requested if the student is in a dental/medical internship, medical residency program, a national service program, providing teaching service, or have been activated by the governor as a member of the National Guard. The other way a person may receive mandatory forbearance if the student loan payments each moth totals more than 20% or more of their gross income.
  • Discretionary is only granted by the financial institution that gave the student loan. This helps the student to learn the best way to handle student loan debt.

If the choice is not to pay the interest but to let the interest of the student loan accumulate then this may also be capitalized. Capitalized means that it can be added to the principal balance resulting with the person paying interest on it as well. Then again if they do not qualify for either deferment or forbearance the next step is to negotiate a change in the repayment plan. Parents and college graduated adults for this reason should go to the Studentloans.gov website. There they can use a repayment estimator to see if they are eligible for a variety of payment plans and give them an estimate of monthly payments. This way they can begin to handle student loan debt in their budget.

Consolidate Student Loan Payments

However parents and college graduates might find that this simplifies to a onetime payment each month.  People need to look at all payment plans before making an important decision and learn how to handle student loan debt. These loans usually have a 30-year term which will increase the interest in the long run. This will also mean for the college graduate that they will be paying on the student loan until they are in their 50’s and have a family to take care of along with its responsibilities. Of course if the parents are paying for more than one child in college and financial responsibilities until that graduate student gets on their own. These individuals will be paying on student loans until their 60’s before the student loan is completely paid off.

In this case parents and young adults should compare any new payment to their current monthly payments to make sure the best option is a direct consolidation loan. Provided below is several types of loans that can be placed into a direct consolidated loan. People should check on the financial aid government website to see if there have been any changes to the loans for college students.

  • Direct subsidized/unsubsidized
  • Federal Family Education Loan Program (FFEL)
  • Parent Plus Loans
  • Federal subsidized/unsubsidized Stafford Loans
  • Supplemental Loans for Students (SLS)
  • Direct Plus Student loans
  • Federal Perkins Loans
  • Health Education Assistance Loans

A final point is there is a movement to forgive the debts of student loans. The following video discusses the idea of forgiveness and why it might not be such a good idea for the economy.

The Small Ways to Get Out of Debt Free

get out of debt free

When a person is in debt it can sometimes feel like there is no way out of the overwhelming situation. The thoughts of how to get out of debt free can seem daunting. In order to reduce the stress and anxiety over debt is to know your situation and take steps to reduce your debt. One way to get out of debt free is to take each problem separately rather than being consumed with the big problem of debt.

Know Your Money

It is important that no matter your financial situation you know how you are spending your money. This is something that is accomplished through two things.

1.    Know the Facts

It can be a stress saving situation if you decide to know how you spend your money. Take all the money that you spend in a month and track it. Determine how much you are spending on things such as utilities, entertainment, transportation, and groceries. Be sure to account for everything, because knowing exactly where you spend your money is the first place to gain power over your getting out of debt free.

2.    Modify Your Behaviors

Another part of knowing your money is learning ways in which to decrease your expenditures. Take the list of places that you spend money and determine if there are ways that you can decrease how much you spend. In some cases to get out of debt free can be as simple as taking your lunch rather than purchasing lunch at work or carpooling to work.

Know Where to Focus

When trying to get out of debt free you think that you need to eliminate the debt. This can be difficult because all the debt is important to get rid of, so how can you know where to focus your funds. One can have many different types of debt and a rule of thumb is to pay off the highest interest rates first. However in some occasions if you have a balance that is low then it would be beneficial to get rid of that debt before moving on to the higher interest rates. You can try to reduce your interest through communication with your lenders. If reducing the interest isn’t an option through your creditors you need to look into other ways. Some of these ways may be transfer balance or consolidation loan that can reduce many of interest rates in to a single low interest debt.

Enough Income

It is important to understand that no matter how you choose to get out of debt free you will need to have the income to do it. There are times that one does not feel that they are making enough money to satisfy all of their needs. Sometimes we need to think about the little things that we can do in order earn some extra money.

  • Requesting a raise. Requesting a raise may be one of the ways that you can increase your income. Take on extra duties or extend your shifts, these might be options that could help to increase the money you have coming into the home.
  • Short-term freelance. If you don’t have the ability to increase your income through your full-time job, you might look into freelancing with companies that offer short-term jobs. Elance.com and oDesk.com are two sites that are like this. These sites offer the ability to be paid for jobs like writing, transcribing, designing, as well as many other jobs available.

Motivation Can Be Hard

Some people feel that while trying to get out of debt free you life is disrupted and might not be worth the challenges and modifications needed. Whenever you are trying to make a big change in life motivation can make or break the success. There are some basic things that can motivate us through life changes.

  • Family
  • Life goals
    • Education
    • Retirement
    • Family growth
    • Buying a home
  • Winning a challenge
  • Advancements

It is important that a person be willing to embrace the motivations that will help them get out of debt free. Use this to your advantage by creating things that can help you stay on track. This can be accomplished through checklists, or inspiration boards, or even a date to be debt free by. Any of these motivation tactics might help to self motivate you through the process of getting out of debt free.

It is important for one to see how it is possible to make small changes to simple problems that can help to change the entire outcome of your debt situation. Getting out of debt free can be one of the most complicated and stressful situations that you will ever be placed in, however with small steps you will be able to advance and succeed through the process of financial freedom.

Get Out of Debt by Facing Your Debt Head on

get out of debt

Often, we are deterred from doing positive things in our lives solely because we deny the presence of an issue. If you are unable to pay bills on time, overwhelmed by interest rates and may be skipping payments on your credit cards, you may be in debt and need to get out of debt. This is not the kind of debt you can easily spring back from, but debt that you can drown in- debilitating debt that might take you years to pay off. If this sounds like you, read on to explore the various debt related myths.

Myth #1: “I don’t Have Any Debt!

Very often, denial of a problem is the first hurdle to getting out of debt. Any unpaid, outstanding, non-mortgage bills are considered debt and if you have any unpaid personal loans, credit cards or debt with family, you are in debt. In debt, you can often get stuck in a vicious cycle of paying one creditor off by using another and that can only drive you deeper into debt. If you want to start getting out of debt, acknowledge the problem and that you need help- it can be the first step to getting out of debt. The first step once you’ve acknowledged the problem is to make a detailed list of all your outstanding debt. In addition, also make a list of your income and your monthly expenses to determine how much money you can dedicate a month to paying off your debt.

Myth #2:  “Budgets Can’t Help Me.”

Really? Really, budgets are the most valuable tool you can use to spend within your means and avoid additional debt. Reconsider using a detailed budget for your monthly expenses. There are several benefits to having a monthly budget:

  • A budget forces you to detail all expenses, income and outstanding debt.
  • Having a budget written down can help you see unnecessary expenses that you can cut down on. In addition, it can also help you determine what expenses are essential and those that aren’t.
  • You can also help yourself by only using cash for your expenses- this can help you cut down on your expenses and avoid unnecessary expenses.
  • Eventually, a budget can help you outline your expenses and find a way to pay down your debt.

Myth #3: “It is Impossible for Me to Pay down My Debt with My Income.”

Are you tightly strung, financially, between paychecks and find that you cannot pay off your debt, even if you tried? In fact, financially tight periods can be helped by living on a budget, cutting down on unnecessary expenses and getting together a plan to get out of debt. Even if you are able to make extra contributions to paying off your debt every month in addition to cutting down costs, you can be sure that you can effectively get out of debt. Also, consider getting another job- one and a half jobs or even two jobs can help you get out of debt even faster. There are tons of jobs available today that you can do from home- one of these jobs can supplement your income. Consider using the income from one job solely to pay off you outstanding debt.

Myth #4: “Professional Debt Consolidation Help Is Overrated.”

Actually, professional debt consolidation can really help getting you out of debt. Here’s why:

  • While you can pay off your debt on your own, it is hard for a family or individual to stick to their plan 100% of the time. Debt professionals can monitor your progress and suggest changes to pay off your debt faster.
  • Some debt professionals can help consolidate your multiple debts into one loan. This one loan allows you not only to be responsible for only one loan; it also allows you to pay a lower rate of interest than you were paying for multiple loans.
  • Yet other debt professionals can talk to your creditors and help reduce the amount you owe them.

Professional debt help can help you to stay on target with your debt repayment plan and get out of debt faster than you thought possible.

Myth #5: “I Work So Hard…I Deserve To Spend On Myself.”

Yes, you do work hard and that is even more of a reason to get out of debt. It offers peace of mind that may be more valuable than material things. Also, there is nothing to say that you couldn’t have fun for less. Rather than a movie at a huge theatre, consider going to free movies at the park. Look for sales to buy your favorite things like clothes. Have a strict spending budget on your interests and only after you have made your monthly payments to pay off your debt.

The most popular debt repayment myths are really not myths at all…just misconceptions. With meticulous planning and some effort on your part you can get out of debt too.

Turn Here If You Need Help Getting Out Of Debt

need help getting out of debt

With today’s roller coaster economy and many countries facing tough financial decisions, it is no surprise that many households and individuals are facing tough financial decisions as well. Some individuals are finding that all their income is funneled towards paying off debt with not enough left over for essential living expenses like food and housing. Many families and individuals are not only seeing reduced income but also spiraling cost of living and often have to turn to paying off one debt using another. In addition


Getting Out Of Debt Strategies
, families are finding themselves unable to pay housing expenses and for other essential services. Does this sound like you? Then, you need help getting out of debt! Getting out of debt is not easy, but it is possible. With a combination of life changes and some professional help, you can successfully get out of debt.

The first step towards any big change begins at home. There are a few life changes that you can make to curtail your debt and reduce your debt. Consider making these lifestyle changes when you need help getting out of debt:

  • Build a Budget: A budget is the number one tool that can help you when you need help getting out of debt. It can help keep you on track with your expenses and help pay off your debt. Create a strict budget for yourself, considering your income and spending only as much as your income affords. In creating a budget, also consider how much you owe and how you can pay it down.
  • Curtail Spending: The number one way to pay off your debt is to avoid new expenses. Try to cut spending- cutting small expenses can go a long way. For example, eating out once a month instead of once a week to cut your monthly expenses. Also, try using cash for your expenses- this helps you keep track of how much you spend versus credit card spending in which you may not be able to track your expenses as closely.
  • No New Debt: There are several credit card companies and banks ready and willing to offer you new loans, but the point of debt consolidation is to accumulate no new debt. Don’t accept any new loans unless they are debt consolidation loans.
  • Alternate Income: Look for ways to supplement your income by working an additional part time job or working from home. Increasing income can help you pay off your loan even faster.
  • Save Some: Making a habit out of saving will help you create an emergency fund for the future and help you save for big future expenses. It is better to buy large items by saving money for them rather than to buy them on credit and find yourself unable to pay for it later.

With these few personal life strategies, you can start cutting your debt sooner and get out of debt faster.

Professional Debt Help

If you need help getting out of debt even after applying personal spending and saving strategies, it might be worth it for you to get professional help. Professional financial help can come in many forms. No matter which program you choose, know that you must divulge all your financial debts to your advisor- it is the only way to ensure you get the best help possible. These are the most common:

  • Debt Consolidation: You can reach out to debt consolidators if you have debt with multiple creditors. Debt consolidation can help by bundling all your debt into one debt. So, essentially instead of having to pay off multiple creditors you would only have to pay one. This is most often done through debt consolidation loans offered by these firms. They can pay off your debt and then you pay them back. Debt consolidation firms are well versed with various creditors and can negotiate with them to lower your debt, your interest or your late fees. This negotiation can amount to a large discount in the money you owe.
  • Debt Settlement: Debt settlement programs also work somewhat along the line of debt consolidation. They negotiate with creditors to reduce or consolidate your debt. But, the difference with debt settlement is that they do not pay your creditors up front like debt consolidators, but create a trust account in your name and pay off creditors from this account.
  • Debt Management: In addition to credit consolidation offered by debt consolidation and debt settlement programs, debt management programs offer financial counseling as well. So, in addition to reducing your debt, debt management also offers advice on how to reduce your spending, your budget and your income. They can guide you and track your income and expenses to help you get debt free sooner.

If you see your financial situation getting worse and out of your control, you need help getting out of debt.  Be sure to make changes to your everyday life and consult a financial advisor if necessary. The best time to get help is as early as possible so there is not much debt to get rid of. But know that getting out of debt is a combination of personal changes and professional help.

Tips for Getting Out of Debt

tips for getting out of debt

Do you remember when your parents bought you your very first bike? Remember that excitement you felt to show off the new Huffy to the neighbors? Inevitably with the first bike came the first fall, complete with knee scrapes and a bruised backside. But no, that never stopped you, or anyone for that matter! You hopped right back onto that bike and began to ride again, learning new tricks! You became such a good rider that falling was a distant memory!

And while getting back up and dusting yourself off may seem insurmountable, getting out of debt isn’t all that much different. Yes, the stakes are much higher, but the desired outcome is actually quite the same, start over and try again, learning new tricks along the way. Read on to learn the top 10 tips for getting out of debt to kiss that debt goodbye!

 

Budget Budget Budget!

First and foremost, start a monthly budget! Budgets help you:

  • Determine your true monthly income;
  • Compare this to your true monthly debt;
  • Map out a plan; and
  • Pay down existing debt.

This process is imperative to starting the process of getting out and staying out of debt. It is difficult to develop a plan without knowing what you have to start with and where you need to go.

Paying Down the Debt

Once a budget is in place, you can start to knock down your bills. The best suggestion to get out of debt is:

  • Start with accounts with higher interest rates, allowing you to start paying the actual balance faster and ridding yourself of the debt.
  • Pay down the balances to approximately 30% of the available balances.
  • Cut the cards!  Any cards less than a year old with a high interest rate should be paid off and tossed.  The young age of the account will do minimal, if any, damage to your credit if it is deleted.  Only keep cards that are used and needed.

Credit cards can ruin any true plan to get out of debt.  By ignoring the high interest credit cards, you are allowing the credit card companies to take your hard earned money away from you and line their own pockets with it.  The faster these cards are paid down and destroyed, if possible, the closer you are to living a debt free life!  Furthermore, creditors determine whether you are a good risk based on t he percentage of debt to available balances you maintain.  30% is typically the cutoff point before you are considered to be a higher credit risk for the good credit, such as cars and homes.

Cash Only, Please

Stop using the credit cards to pay for life!  Getting out of debt is easier if you don’t rack it up in the process.  It is important to keep three credit cards open to raise your credit, but only charge on them small items that can be quickly paid off, like groceries, not the large 60″ LED TV!

And since, you are living on cash, you must remember, No more shopping sprees. Based on the new budget, you learned what your true flexible spending is.  Don’t overdo it, and then need to run up the credit cards again.  Spend within your spending limits! By cutting extra expenses, like that daily Venti Double Latte from Starbucks, you may find you actually have more money than you thought.

In keeping with finding new room in your budget, don’t go backwards by taking out a loan, such as a debt consolidation loan, to help get out of debt.  That is simply trading one debt for another.  And worse yet, it actually lowers your credit score!

Saving and Earning More Money

Staying out of debt is much easier than getting out of debt:

  • Look for bargains and deals;
  • Use coupons whenever available;
  • Search the web for coupons and deals
  • Negotiate when making a big purchase
  • Use barcode apps when shopping for high priced items; or
  • Invest in a coupon book.

You may also want to earn extra money by:

Sometimes, the additional income earned by bargain hunting and an extra job can allow not only for getting out of debt, but for building the all-important savings! Once savings are restored, it is easier to avoid future debt pitfalls.

And When All Else Fails…Call for help!

When all else fails, remember there are professional non-profit agencies that specialize in helping people get out of debt. These companies are adept at negotiating with creditors and achieving more manageable balances with lower interest rates. While these arrangements may affect your credit for the three to five years you are in the program, when you have finished paying the debt down, you emerge with a clean slate and sparkling credit!