Debt buster methods to save you from financial ruin
Simple tips to reduce your ballooning debt
Do you keep on using cards to meet your daily expenses? Do you find yourself borrowing money to pay off your monthly bills? Have you turned over some of your credit cards to a collection agency? Are you having trouble meeting monthly payments? Are you having trouble with your debts? Then you are in need of a good debt buster to get that financial worry off your back. Take note that when you realize that you are drowning in a sea of financial trouble, it is never pleasant to pretend that you are doing fine and that the situation that you are in is not is just an illusion that vanishes when you force yourself that it is not real.
Never think that the problem does not exist because it actually does. Accepting it and searching for ways to solve your debt problems is the best way that you can do. Anyway, you are not the only person in the world who is going through financial troubles. You need information when searching for solutions in solving this kind of problem. I have written in this article five ways to help you reduce your debt. Not all of the methods are easy to follow; some may take time, yet all call for commitment and effort. Nonetheless, when you put these into practice, you will see that your effort and sacrifices pay off when you see your debt slowly getting off your back.
The first thing that you should do in getting off your finances is to develop a budget. When you build a budget, you have to assess your financial status. To have a better assessment of your financial situation, you should take into account all your income, expenses and how much you should save. First and foremost, when you draw up your budget, you should list down all your income. Then, list all your necessary expenses: mortgage payment, health insurance payment, auto loan payment and the like. These are fixed expenses that don’t vary from month to month. Next is to list all monthly expenses and bills that vary every month such as: telephone bill, water bill and electric bill. You should also include in your list all your daily or regular expenses such as: food, transportation, entertainment and the like. To develop a budget that lets you meet your monthly expenses is the main goal of this method. It will also help you figure out where you can cut on expenses and start paying your debts. Always remember that when you build a budget, you have to stick to it.
Paying only the minimum payment on credit cards and loans is not wise because this won’t help you in paying off your debts fast. Although it is generally not good to pay only the minimum payment, there is one exception. We are well aware that when there is debt there is monthly interest that goes with it. When you have several credit cards and loans, then you should also pay interest rates for each of them and you have to keep up with your monthly payment to eliminate them as quickly as you possibly can. If you have one or more outstanding loans or credit card payment with high interest, you have to choose as to which should be eliminated first by paying a larger amount and meeting the minimum payments on the other debts for a few months. Through this you can lower down the remaining balance on your most expensive loans. When you finally get lower interest rates, you can then pay more on all the other payments and finally pay off all your debts in no time.
There another debt buster method that can help you in handling your debts when you have outstanding loans and credit cards with high interest rates and that is to transfer your balances. Nowadays, available in the market are credit cards with 0% introductory rates for six months to one year and low interest rates for balance transfers. To lower interest loans and lines of credit, taking advantage of these offers during the introductory period in the market is a good course of action.
When you are paying on several and varying interest rates because you have several different debts, a debt consolidation loan would surely make sense for you. When you take debt consolidation loan, all your loans are merged in one loan thus making only one interest rate for the sum total of all your loans. You will only have one monthly payment to deal with. You can also take a longer payment term and lower interest rates when you consolidate all your debts. This will lower down your monthly payment and save up for other investments.
Another tip that you should know of is to build good communication with your creditors. When you know that you are having trouble keeping up with your monthly payment, inform your creditor at once. Do not delay. Creditors are starting to understand and take into consideration different factors that may affect regular payments of their clients. In most cases, they will work out a payment plan that will help you meet monthly expenses. Surely, your creditors would not prefer taking stronger measures in collecting the money from you because it costs them more money to refer your debt to a collection agency. They are just like you; don’t want to spend on any unnecessary things as well. When a payment plan is made for you, it may lead to renegotiating the terms of a loan agreement or it may extend the period of your loan. It may be more of a hassle but it will surely save your credit rating and pay off all your debts slowly but surely.
It’s time to clean up your debt situation with these effective debt buster methods.