|
Responsible Debt Management Budgeting for Debt Management
Of course, the earlier you make a financial plan (think budget), the better and easier life will be. However, if you have been conducting your financial life without a plan and find yourself in a real financial bind, it isn't too late to make a budget now.
If each payday, you are only paying the creditors who are screaming the loudest, you need a plan, my friend.
There are many sites on the Internet that have forms that guide you through the budget-making process. Choose one that looks like it could work for you.
The first thing to do as you follow the instructions for making a budget is to list the bills that are for the necessities of life....food, shelter, utilities, transportation, and clothing. These expenses are not optional. After you figure out how much just covering life essentials comes to each month, the remainder is what you have for paying other bills. This is what we call disposable income.
If the total of your disposable income is less than the minimum payments that you are being required to make each month on your secured and unsecured debts, then you are going to need to make some changes and maybe get some help.
The first thing that you can do is contact all of your creditors yourself and try to make arrangements for paying them in a time frame that you can live with. But there are other options.
One option is to contact a debt management company. These companies can help with your unsecured debts (credit cards). There are both paid for and free debt management services available.
Another option is a consolidation loan. This is almost always in the form of a second mortgage, but it could be the answer that you are looking for.
A third option is a debt negotiation company that can negotiate with your creditors for you and get settlements of debts for greatly reduced amounts.
See Also:
Debt Management - The Controls
| Debt Management Debt Collectors Debt Management and Family Crisis
A family crisis can be caused by many things. A job that was thought to be secure can be lost. Sickness and accidents can happen. An older parent can require care.
Lots of things can happen that are beyond your control, and certainly not your fault, but that can put you in a financial bind.
A decrease in income has the same effect as an increase in out-go. There is the inevitable shortfall. Maybe the shortfall is temporary and you can see the light at the end of the tunnel. Maybe there isn't a light at the end of the tunnel and you really can't say just how long this financial crisis is going to last.
What you can do to get yourself and your family through a really rough spot financially will depend greatly upon how you have handled your finances before. If you have always paid your bills on time and in full each and every month you will find that your creditors are going to be more than willing to work with you and actually help you survive your crisis.
The first thing to do is to contact each creditor yourself. This should preferably be done before the first payment is late. Explain the situation and you will likely find that your creditors will allow you to just make interest payments only and that it will not do any harm to your credit score. This is the first and best option.
If your family crisis is going to continue for more than a few months, then you may need to seek some relief through a consumer counseling agency or through a debt management company. You might even consider the possibility of a debt consolidation loan.
Whatever course of action that you choose, it is far better for you to initiate it and to do so as early as possible before any damage is done to your credit score. |
|
More articles:
Rumours about debt: be careful who you listen to - Debt Advisers ...
Debt Management Wiggle Room
Surviving Debt Management Do-Overs
Providing alternatives to bankruptcy through the use of debt ...
Debt consolidation - Money Management made Easy
| Credit Card Debt Management Debt Management: Getting the Priorities Straight
Using half your paycheck to buy lottery tickets in hopes of winning millions instantly is not a satisfactory debt management plan. Successful debt management is based upon truth, reality, and keeping your priorities straight.
The necessities of life must come first when you make your debt management plan. You need food, shelter, utilities, transportation, and clothing....and pretty much in that order. After the total cost of these necessities is subtracted from your bring home pay, what's left is your disposable income.
How much you spend on each of these necessities will determine the total cost of your necessities. When you cut the cost of any of the necessities, you will have more disposable income and when you add to the cost of the necessities, you will have less disposable income.
My daddy summed it up pretty well for me. He said, “The less you spend on what you have to have, the more you will have to spend on what you want to have.”
You have to make your own choices, of course, but here are just a few ideas that might help:
1. Food: It costs less to eat at home than it does to eat out.
2. Shelter: Less space costs less money....usually.
3. Utilities: Raise the thermostat by two degrees in the summer and lower it by two degrees in the winter. Turn off lights when you leave a room. Don't leave water running.
4. Transportation: A five-year-old car will take you to the same places that a new car will take you.
5. Clothing: Clothes purchased at discount stores costs less than clothing purchased at upscale clothiers.
Debt management is all about getting your priorities straight and making choices. Priorities are nonnegotiable, but how much you spend on them is negotiable. |
Related Topics: The Debt Management Plan,
Comparing Debt Managements Services, Free vs Paid Debt Management Services
|