More Than Finances

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Solutions to Paying Off Your Debt

Few people realize just how much of an impedance debt is to moving forward in life. Not only does being in debt create stress and barriers, it sometimes seems like a downward-spiraling tunnel that just keeps getting deeper and deeper. How do you get out it?

If you’ve got several outstanding bills, then debt consolidation just may be the solution that works for you. Having all of your bills in single place, where you can take care of them with just one monthly payment at an agreeable rate of interest, is a confirmed stress-reliever for many people. Online sites such as consolidate.loan are comprehensive sources for those looking for debt-resolution options. In the following, you’ll see how many people in your situation are extracting themselves from the debt-spiral.

First and Foremost: Suspend Borrowing

This is the primary reason why debt is so hard to get out of – you have to stop using your credit cards. If you haven’t used the available balance so much so that your minimum payment has risen above the lowest possible amount, then you can keep using the card up until then. But no matter what – remember, you have to pay this back, too.

You need to dial down on the expenses of your lifestyle to only what you can afford to pay directly. This means buying food with your debit card or just cash, and doing the same when you go shopping. There is no game plan for debt-reduction that doesn’t include suspension of debt-utilization.

Start Saving Money for Emergencies

This one takes into account the common use of credit cards for emergencies. Although, of course, you should use your card if you have no other alternatives, this represents a big hit on your reduction plans. By steadily saving actual money from your paycheck and placing it into a separate bank account – many online accounts these days allow you to create sub-accounts – you have something to fall back on for the unavoidable.

Besides, once you do this – you’ll better appreciate the utility of saving cash for general purchases, too. It’s all about having the right mindset to solidifying your financial future.

Budgeting for Everyday Expenses

The beauty of this part, in particular, is the availability of numerous apps that tally and automate this process. You enter the initial details, which consist of all your sources of income and the expenses you manage. It makes the goal of debt reduction real in your mind, and provides you with a mechanism by which to track your progress in real-time.

The surplus amount of cash you have after accounting for income and expenses can be used to pay your debt down steadily. If you’re in a deficit, then it’s unlikely you’ll be able to reduce your debt appreciably. You will need to increase the number of hours worked, or get a new, higher-paying job. Reducing your expenses also has a similar effect; the point is that you need to turn your deficit into a surplus if you hope to pay off your credit cards.

Some options could be becoming an Uber or Lyft driver in your off-time, and using whatever extra money you pick up to pay off your bills. You’d be surprised how quickly it will add up. There are plenty of these kinds of jobs available; and, when the income you pick up is coupled with cancellation of creature comforts (how often do you really watch the $50 per month of cable you purchase?), you’ll find it much easier to hit the deadlines you set in your debt reduction app.

Map Out Your Debt

This just means separating your debt into manageable sections. You want to get rid of the high-interest debt first, of course, since it represents the single greatest impediment to hacking away at the principal. Another method is arranging it from greatest to least – irrespective of interest rate. Either one works; it really just depends on which you prefer. You’ll build up steam and find it easier to pay off as you go along.

Once your debt is manageable, don’t stop – keep paying it until it disappears. You’ll see just how many prospects open up once you’re no longer being dragged down by interest rate payments.

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Your Family Deserves Your Full Investment: Lower Your Family Debt and Give Them a Better Future

Most of us know the harrowing statistics about credit card debt. The average Canadian owes over $22,000 in non-mortgage debt, and much of that debt is credit cards.

Most people can comfortably pay off less than $10,000 in debt, if the moneylenders give them enough time to do so. That’s often a very big “if.” Credit card debt above $10,000 is almost impossible to retire without making extreme sacrifices, and that is a difficult thing to do when so much money simply goes to interest payments.

In both these situations, it’s usually best to consolidate multiple debts, like credit cards, with debt help counseling.

How It Works

It is almost impossible to consolidate credit card debt on a piecemeal, individual basis. For one thing, most people do not have several hours to sit on hold or participate in an endless email thread; for another thing, there is no guarantee that the person you are speaking with has the authority to reduce payments or interest rates.

On the other hand, when a debt consolidation specialist reaches out to a moneylender, good things happen. A trained debt counsellor knows what to say and how to say it, typically because a debt consolidation firm has a pre-existing relationship with most moneylenders that’s been successful in the past. Moreover, when a debt consolidator represents several families, the results are even better. These results often include:

  • Reduced interest rate,
  • Waived late fees, and
  • A hold on adverse action, like collections calls and even civil lawsuits.

As a result, the debt is paid off faster because more money goes to principal reduction each month and there is much less debt-related stress.

There’s more. Teaming up with a debt consolidation specialist gives you access to professional credit and budget counselling, which helps you understand why these obligations grew so much in the first place. Since it empowers you with healthy money management habits, debt consolidation sets you up for future success.

Better Than the Alternatives

Regardless of what you do or do not do, the credit card bills are not going away. And debt consolidation is a much better alternative than some other approaches.

Paying full price and full term is simply not smart money management. It’s very important to teach your children to be good stewards of their money, and the best way to do that is to set a positive example. Debt consolidation is a great opportunity to do just that.

Bankruptcy usually is not a very good alternative for credit card debt either. This avenue is really best for people who have issues with mortgage debt and other secured debts, because the possible adverse action (namely foreclosure) is so much worse. Using bankruptcy to deal with credit card debt is not quite like using a flamethrower to kill a housefly, but it is rather close. Bankruptcy also does nothing to restore your credit rating, and paying off credit card debts usually has the opposite effect, even with a debt consolidation loan.

The longer you delay this decision, the more interest you pay, so make the call to a debt consolidation specialist straightaway.

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When There is no NestEgg: Where Do You Go When Emergencies Happen?

stretcher-1685611_640Not everyone has a nest egg that they can fall back on in times of financial need. If you have recently experienced an emergency and need quick cash, you might be at a loss as to where you should get it. After all, you can’t get money from a bank account that doesn’t offer much room for flexibility, so you’ll need to find another way to get funds.

Title Loans

Title loans use your vehicle as collateral, which gives you better chance of being approved for the loan. These loans are ideal because they can offer a large sum of cash that will be approved quickly and easily. Credit scores may or may not make an impact on your eligibility simply because you are using something as collateral. Plus, you can easily just get a title loan online without needing to visit a local bank.

Payday Loans

Payday loans aren’t necessarily the best option, but they do offer a lump sum of cash when you’re in a financial bind. The main issue with payday loans is the fact that they need to be paid off quickly, often in a matter of weeks, and the interest rates attached to them are often quite high. Be careful of taking out a payday loan and do diligent research on the lender if you choose to go this route.

Family and Friend Assistance

If you’re in a financial pickle, one of the best places to go for help is friends and family. You can borrow money from a loved one and pay them back in small, affordable increments. You may need to go to several friends or family members before one of them offers to help out, and it’s vital that you keep your word and pay them back. Many friends and family members have taken their loved ones to court because of unpaid personal loans between each other.

Extra Employment

One way to gain a bit of extra money that does not entail a loan of any kind is to start working more proficiently. This might mean that you’ll need to get a small part-time second job or that you’ll have to get more hours at your current workplace. Don’t be afraid to ask your employer about getting more hours, or you might want to look at part-time jobs in your area that will pay well and provide you with the money that you need during this tough financial time.

Plan Ahead

Because it can be difficult to deal with a financial emergency when you have no nest egg to fall back on, it’s imperative to start planning for the future after dealing with this issue. One way to plan for emergencies is to set up a savings account that you can utilize when times are tough. Putting a little bit of money each week into your new savings account can help tremendously when an emergency pops up. You can also speak with a financial advisor if you are looking to save even more cash for your future.

No one likes to think about an emergency situation coming up that entails they might need to take out a loan or ask friends for assistance, however, you need to do what is best for you to avoid total disaster. Taking out a title loan, for example, is a much more viable option than dealing with the emergency in the first place. Be sure that you look at your options to determine which one is best for you concerning your needs and your current situation.

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Make Money While Paying Off Debt

How to Work Towards a Healthier Bank BalanceNew Solutions to Help Defray Debt’s Stranglehold On Life

There are many ways to save money. You can use green options to replace grid-based energy and utilities, you can make some extra money online through various agencies when things are tight, and you can even use crowdfunding in order to overcome expenses or difficult financial situations.

When it comes to loans of the student, business, and personal variety, the payback will be specifically regimented, often in the manner of paying a certain amount every month. The reason lenders can afford to do this is because of something called “interest”. Basically, interest is an added fee to your existing loan.

Such loans can be sustained for decades at a time, though you should be aware that the initial cost of the loan may double over years. The best solution is to pay as much into a debt as possible, and as regularly as you can. Ideally, you’ll avoid debt altogether, but in today’s society that is next to impossible. So plan ahead.

As DebtSettlement.co points out, a good sample business debt settlement agreement would incorporate principles which are strategic; those paying a debt would ideally: “Set aside funds each month during debt settlement negotiation to pay…creditors once your debt settlement company successfully negotiates a lower balance.”

Common Difficulties

The problem is that it isn’t always possible to directly set aside funds based on your current monthly spending. The key is cutting the fat, polishing away the dross, and diminishing your unnecessary expenditures on a regular basis. Don’t buy any new clothes for a while. Don’t finance anything else. Stop buying $5 coffees!

In a 30-day month, a $5 coffee every day comes out to $150 in a month. How much is that in a year? $1,800. Now imagine spending the same amount on fast food. By eliminating these two indulgences, you can cut out up to $3,600 in costs. If you start buying coffee at the grocery store and cooking at home, it will be realistic to expect to save up to $3,000 annually.

Now: if you’ve already got a loan payment, and you’re able to hit it every month anyway, such cost consolidation can additionally increase your pay-back on the loan. If you were paying $400 a month on a $10.000 loan, by cutting out expensive coffee, you can now pay $550 every month.

When All Else Fails
But sometimes individuals are in a situation where they’ve already consolidated their expenses and are still having trouble paying their regular bills. In such situations, it may make sense to contact relief organizations and institute a crowdfund. There are countless groups who are dedicated to helping people help themselves.

Or you might look into green energy. A $300 solar energy system including a power inverter, a surge controller and a battery can produce around 100 Watts per hour. You can charge your smartphone and laptops for free, thus minimizing your utility bill.

Using techniques like this will allow you to increase your payments on a monthly basis by consolidating expenditures. This means that you can still save money with shrewdness. All you’ve got to do is budget strategically, and use all the means you have at your disposal. If you’re able to pull in $2,000 a month—which is achievable even at a low-end job—you can succeed.

Search for the least-expensive housing solutions you can find. It’s definitely possible to live sustainably for around $500 a month or less, single or not. If you also spend $500 on food, gasoline and unexpected expenses, you will have additional $1,000 that can be split between paying back the loan and savings. It just requires forethought and discipline to achieve.

 

Things to check out around the web:

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Is Debt Consolidation Right for You?

Working Overtime - A Blessing Or A Curse3 reasons to refinance before you are caught in the debt cycle

A vast number of Americans live in a the debt cycle of spending more money than they have coming in while financing their existing debt. There are many reasons that people fall into the debt trap, yet only a precious few ways to break out of it.

The current sluggish economy has made it difficult to break out of the debt cycle. Cost of living continues to rise at historic rates, but income has remained relatively stagnant for the last few years.

What is the debt cycle?

Although not all debt is bad, having debts that you are unable to pay or debts that take away from your standard of living is not a good thing. Many of us rack up a lot of debt going through college, buying a house or after a severe illness or accident.

Paying off that debt can lead to an unsustainable lifestyle as we are forced to choose between paying our living expenses or paying off our debt. Since the immediate effects of not paying rent or a mortgage, skipping car payments or not buying groceries are apparent, the bills that most often don’t get paid are the ones that have no immediate effect other than on our credit rating.

The importance of credit

Generally, concern for our credit rating is well down on the list of needs. Food, shelter, work all come above it, but the health of our credit rating can have major effect on our standard of living, especially as we get older.

In addition to making it more difficult to buy large ticket items like a home or vehicle, a poor credit rating can cause unexpected problems when trying to get a job, getting auto or home insurance or renting an apartment or a house. Keeping your credit rating in decent shape should be a top priority.

Fixing your credit once it is damaged

If your credit rating isn’t in decent shape, there are steps you can take to repair it. However, the first thing you must do is to correct the underlying problems. Paying off your bills only to immediately begin accumulating them again only reinforces the debt cycle. To break free, you must fix the behavior that causes the problem in the first place.

Identify your financial problems, create a budget and reduce your spending, especially your use of credit cards that cause more debt. If that doesn’t solve the problem then there are things you can do to repair your credit rating.

  • Get copies and review your credit reports. In 2013 the Federal Trade Commission found that 25 percent of credit reports had errors in them. These can range from incorrect billing to outdated information. Fixing your credit might be as simple as discovering and disputing an error.
  • Raise your credit limit. Although this might seem counterintuitive, raising your credit limit on your credit cards but not utilizing them can improve your credit utilization ratio. This ratio is the percentage of credit you use compared to the credit you have. The lower the percentage, the better your credit is. Raising your limit while paying off your credit cards and not using them will improve the score.
  • Get a debt consolidation loan. Refinancing existing debt and consolidating payments can have multiple benefits. Your payments are lowered, there is less of a chance for a mistake to damage your credit and you only make one payment per month as opposed to multiple. Merging debts is not for everyone, but to see if debt consolidation is right for you, you should speak to a professional who is familiar with it.

Fixing your credit can be a lengthy process, so don’t expect overnight improvements in your rating. Patience and persistence will carry you through until your credit score is decent again.