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Debt Consolidation Loans-Yes or No American Version of Debt Management
The American version of debt management seems to be; buy now, pay later, or worry about it later. “Instant gratification” has replaced “save for a rainy day” as the watch-word for Americans regarding their money.
Most American households do not have savings. They simply live paycheck to paycheck. They pay what has to be paid THIS WEEK, balance the checkbook, and decide how to blow what's left....and those ARE the responsible ones.
The irresponsible ones get a paycheck, do what they want to do, buy what they want to buy, and if there's anything left, they use it to pay the bill that is most pressing at the moment. Neither method could be called responsible debt management or sound financial planning by any stretch of the imagination.
Saving money is rapidly becoming a lost art form in America. In a recent study, only 41% of all American households actually had savings accounts, but 75% of all American households are carrying substantial debt.
This is certainly not the kind of money management that our grandparents would have approved of. There was a time when being in debt was a shameful thing but that idea went the way of the Model A, apparently.
Declaring bankruptcy became so easy, and so many people were taking advantage of it, that Congress finally had to make it more difficult. Debt management businesses are thriving, and you can't turn on the TV without seeing an advertisement for debt consolidation loans.
Americans need to return to the sound financial practices of the past, like save first. American mothers and fathers need to instill the basics of debt management into their young ones. American high schools need to require that a course in financial planning and debt management be successfully completed before a diploma is awarded.
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| Online Debt Consolidation and Debt Management Services Debt Management Debt Collectors
The Fair Debts Collection Practices Act sets guidelines about what debt collectors can and cannot do. You need to know the rules so you know when they have been broken.
If you have the unfortunate opportunity to deal with a debt collector, you need to know what your rights are and know the best and most effective way of dealing with one.
Debt collectors can call you on your home phone during business hours. They can call you until you tell them, in writing, to stop. Once you have given them written instructions to stop calling you, that does not erase the debt, but it will stop the phone calls.
Debt collectors cannot threaten you with bodily harm. They cannot misrepresent themselves as being associated with the government or with a credit reporting agency.
If you must deal with a debt collector, never assume that they will play fair or that they have your best interests at heart. They won't, and they don't.
Do not ever send post-dated checks, and never give a debt collector the right to draft payments from your bank account. These things can end up costing you more money and more trouble than you already have.
When you are negotiating with a debt collector, remember that you are dealing with a person who has been well schooled in the art of negotiation. They know more about it than you do.
Never give a debt collector personal information like where you work, what your income is, or your bank account information. They do not have the right to even ask you these questions. If they do, and you let them know that you are informed about the law, it will strengthen your position.
Nothing that you do when you are dealing with a debt collector will erase the debt. But knowing the law, and knowing what to say and what not to say, can keep you from more grief. |
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| The Debt Management Trap-Credit Cards Debt Management Wiggle Room
Yes! If you are ever going to gain control over your finances, you are going to have to make a budget and learn to live within it. There aren't any other options for successful debt management.
You wouldn't start building anything without plans, would you? Even building a model airplane requires following a plan. Building a house always starts with drawing up the plans for the construction. There is an old saying that applies here: “Those who fail to plan, plan to fail.” Without a financial plan (a budget), you are certain to find yourself in debt up to your eyeballs and no visible way out.
Now, let's discuss the making of a budget. You cannot have every last penny of your net income allotted for providing for necessities and paying installment loans. That will not work. You must leave yourself some wiggle room. Stuff is going to happen. There WILL BE unexpected and unbudgeted expenses every single month. You can bet on it...you had BETTER bet on it.
There will be, without any doubt whatsoever, expenses that you will overlook when making your budget. They may seem like small items that aren't very important, but they have a way of multiplying.
For example: you suddenly realize that the inspection sticker on your car or truck is about to expire. There really isn't much of a choice about getting it renewed, is there? Will the vehicle pass inspection without two new tires? Are those in your budget?
It has been my experience that "miscellaneous" is usually the largest single expense in every workable budget that has ever been created. You need to allow room for unforeseen expenditures. When making your budget, be sure to leave yourself some wiggle room. Do not budget every single penny of your net income. |
Related Topics: Free vs Paid Debt Management Services,
Debt Management and Home Equity Loans, Budgeting for Debt Management
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