You’ve been burdened with consumer debt for years, and despite your best plans, can’t seem to escape the quicksand effect of using credit cards, trying to pay off debt, and finding yourself deeper in debt. Here are some ideas that can help you get out of debt and stay that way.
Understand what happened: No one gets into debt without making decisions to use credit. Understanding your spending patterns and how you use credit can you make a debt management plan and can also help you avoid repeating your mistakes. If your debt was caused by an emergency or circumstances beyond your control, you now know the value of establishing emergency savings; include monthly savings in your budget.
Know who you owe, how much, and what it costs: Denial is a big part of having credit card debt; it’s easier to avoid adding up your balances and finance charges. Once you write down everything, you can make a plan to eliminate your debt. Knowing how much you owe and what it costs each month can also be a strong deterrent to incurring more debt.
Establishing a method to pay off debt and setting a deadline can help you stay on track: Whether you pay off your smallest debt first or take on the most expensive debt first, setting up a payment plan and tracking your progress is essential to succeeding. If you doubt your self discipline, seek consumer credit counseling and debt consolidation help. Getting a debt consolidation loan can help, but it can be difficult to qualify for unsecured loans if you’re having credit problems. Discussing your options with a financial advisor or credit counselor is useful to find debt consolidation options.
Forget about “just this once”: It’s easy to sabotage your debt repayment plan by using your credit cards for treating yourself “just this once.” Reaffirm your commitment to getting out of debt by replacing “just this once” with “debt free forever” or another positive thought to stay on track.
Use unexpected money to reduce debt: Try dedicating most of your unexpected money toward your debt; this helps you pay it off faster.
Successful Debt Management: Looking Ahead
When you’re working toward freedom from costly consumer debt, it may be tempting to criticize your past actions and decisions. Negative thoughts won’t help you resolve your debt problem. Instead, set up a method to track your progress as you repay your debt. Congratulate yourself for paying off debt according to your plan while focusing on becoming debt free.
When it comes to getting help with debt it’s important to remember that there are no quick fixes. Be skeptical of people who offer debt help and make a lot of promises that sound too good to be true. When choosing debt counseling, look for reputable firms that discuss your situation in realistic terms. Here are four things to consider when looking for help with debt.
You should not pay any upfront frees before receiving debt counseling. There may be fees involved, but look for firms that don’t charge more than $50 as a set up fee or more than $25 a month for services, according to the National Foundation for Credit Counseling.
You should have several choices for credit debt relief. Some debt counseling firms are more concerned with pushing their debt management plan than discussing all your options. Debt mangement plans can help some people, but should not be a cookie-cutter approach for everyone. Find a debt counseling firm that works to tailor a debt reduction plan to your situation.
The credit counselor should take time to thoroughly review your finances. If you feel like your first meeting is being rushed or the counselor is not listening to your concerns, look for a different agency.
Choose a debt counseling agency that offers classes or workshops on managing money. Debt counseling should be about educating people to make better decisions about money.
Chris Rocks is the Regional Director of the National Credit Federation (NCF). NCF is a nationwide membership-based organization that assists consumers recovering from a financial difficulty and those who need a significant increase in their credit score.
Chris began his financial services career as a Financial Advisor helping young families with risk management and asset accumulation strategies. It was during that time that Chris realized that many of these young families also needed someone to guide their choices with regards to debt management.
He made the transition into the mortgage industry where he first worked as a loan originator and later the Vice President of a small mortgage company. As Chris came across clients who had suffered through financial challenges and saw the difficulty they had in re-entering our credit driven economy, he discovered there was a real opportunity to leverage his unique background and help others.
He can be contacted by visiting his personal site, GoodCreditLiving.com.
Francine L. Huff is the Publisher and Editorial Director of Super Savvy Publishing, LLC, which provides editorial and publishing services. She is a gifted author, freelance journalist, and motivational speaker who has entertained and motivated a variety of audiences through workshops, panels and keynote addresses. Francine is the author of The 25-Day Money Makeover for Women, which has inspired and motivated many readers to rein in poor financial habits, become good stewards over their money and work toward a debt-free life. She has appeared on a variety of TV and radio shows. Francine previously worked for the Wall Street Journal, where she was the spot news bureau chief, a news editor and a copy editor. She has interviewed a variety of financial professionals about financial issues and strives to present information about managing money in an easy-to-understand format that is accessible to people of all backgrounds and income levels.
Karen Lawson is a freelance writer with more than 15 years of experience working in mortgage banking and loan servicing. She holds BA and MA degrees in English from the University of Nevada, Reno. She enjoys writing informative articles about debt management and personal finance.