12 Debt Management Tips For Every Month

12 debt management tips

Many people resolve to get their finances in order for the new year. This resolution to manage debt, however, seldom gets very far.

Without breaking the task down into bite-sized bits to be tackled month after month, you are sure to be making the same exact resolution next year.

If you want to manage debt next year, here are some tips you can use.

January: Start a spending journal.

Write down everything you spend for the month of January. This will make you more aware of what you spend. It will also help you see how much of your money is wasted on trivial things.

February: Write and follow a monthly budget.

Based on the spending journal you kept, write a plan that included your regular expenses, your monthly debts, and your needs. Leave yourself a small allowance for miscellaneous things so you won’t feel deprived.

March: Start a filing system.

Purchase a file cabinet and file all of your bills both paid and unpaid for the last two months. Use this filing system to keep your bills organized for the entire year.

April: Get Your Taxes done on time.

Now that you are organized, spend the month of April getting your taxes done on time. Whether you are due a refund, which will help with your bills, or if you owe money, it is wisest to face it and make a plan for how you will pay the money or how you will spend it.

May: Create a debt payment plan.

Take a look at all of your credit cards and loans, and get a full idea of what you owe. Make a list of these bills in order of highest interest rate to lowest and plan to pay off these bills in that order. Pay the minimum of all the other bills and then pay as much as you can on the bill with the highest interest rate. When that is paid off, move to the next bill and begin to pay it off. Finally, get an emergency loan from ElcLoans or a similar website to catch up with your bills.

June: Contact your creditors.

Let your creditors know your plans for repaying them, especially if you are behind on any bills. If possible ask them for help in getting your bills up to date by reorganizing or re-aging the loans.

July: Cut back on your monthly expenses.

Look at your utilities and see if you can save money by bundling, unbundling, or changing companies. Cancel your unused gym and other memberships, and your magazine subscriptions. Decrease your cable and internet subscriptions as much as possible.

August: Treat yourself.

Take a short vacation or stay-cation. Don’t go crazy, but spend a little extra on yourself this month as a reward for your hard work. Do not, however, spend what you don’t have.

September: Make extra income.

Look into part-time jobs, stay at home opportunities, self-employment options. You can tutor, sell items on eBay, or get a part-time job in a retail establishment. Use this extra money to accelerate your debt payment plan.

October: Become Frugal.

Purchase energy-saving light bulbs, rechargeable batteries, and use less cleaning products. Learn to cut coupons or begin shopping in less expensive stores such as ALDI’s and warehouse clubs. You will also want to read a book or two on frugality.

November: Start shopping for Christmas early.

Avoid the December rush to purchase gifts so you don’t incur new debts to start paying off at the first of the year. Firstly, don’t spend more than 2 weeks pay on Christmas gifts. Start putting aside that amount the first week of November.

December: Review your successes for the year and make plans for managing debt in the next year.

Smart Budgeting for Eliminating Debt

An important step for families in taking control of their finances is to understand and be able to deal with their debt management. When budgeting for monthly expenses one important ingredient in that budget should be the provision for managing debt. It is entirely possible that through budgeting and debt management you and your family can build financial security and independence, and save a great deal at the same time.

Unexpected events that may arise during the month often times create the need to use credit. These situations should be anticipated in any family’s monthly budget. What happens most often is that families will spend more in their monthly budget than there income will comfortably allow.

When these conditions are present, the use of credit cards becomes not a practice that takes place out of necessity, but a way for families to live beyond their means. A family living at the very edge of their income is a family headed for serious credit issues in the future. So how can a family live comfortably, manage their debt, and save for the future? There are many ways, and here are a few.

First, the family should take a detailed look at their current debt. A typical family will have several sources of debt from their mortgage, to credit cards and student loans. For most, a mortgage payment is a fact of life and the necessary debt to incur. You should ensure that you have the most competitive interest rate that you qualify for and that the payment is completely affordable. Four other loans and sources of debt, you should as well make sure that you were getting the best deal available, but with this other debt, the goal should also be to eliminate it as quickly as possible.

If you find yourself in a position where you have equity available in your home, it is a good idea to inquire with your bank as to the most competitive rates that would be available for debt consolidation. Many Americans use this tool as a way to combine their debt into one payment, which makes it more convenient, but could also mean lower payments and lower finance charges overall.

If you do not have equity available in your home or you do not have enough equity to cover all of your other sources of debt, you should take those sources of debt and prioritize them in order of interest rate. Those sources of debt with the highest interest rates demand your most immediate attention. The quicker you eliminate sources of debt to carry higher interest rates, the sooner you will become debt free.

Example: if you have $10,000 owed on a credit card at 5% interest and $3000 owed on a car loan at 7% interest, the car loan should be priority one. This does not mean neglect paying for the credit card account; it means making the minimum payments on the credit card and diverting any extra funds to satisfying the balance of the car loan. The goal is to have the least amount of money as possible at the higher interest rate.

Once the car loan is paid in full you will then be able to take the minimum payment you are in making for your credit cards plus the money that you are using to settle your car loan debt, and you’ll be able to begin the aggressively eliminating the credit card debt next.

The best remedy for debt management is to never get into debt at all, but for many Americans that is simply not an option; so the next best solution would be to eliminate that debt in the most efficient way possible.

How to Negotiate Credit Card Settlements on Your Own

negotiate credit card settlement

Before considering hiring a debt settlement service, or a debt consolidation loan, you may want to consider negotiating your credit card debt on your own. There is no absolute guarantee that this will work, but you have nothing to lose by trying. When done correctly, you may very well be able to lower the amount of money you owe and make paying your debts easier.

One of the main reasons that individuals opt to use debt settlement agencies is that they do not possess the knowledge of how the credit card industry works, and do not know what to say when they call. When it comes to credit cards, everything is negotiable to a point. Know this before you pick up the phone.

The first things you should try to negotiate are late and penalty fees. This is where the credit card representative has the most leverage. This is because these fees are not set in stone. They do not involve any purchases you made, and honestly, are optional funds that the credit card company hopes to collect, but does not have to.

Next up would be an interest rate. If you can reduce the interest rate on the balanced owed by even a few points, you stand to save a lot of money. Again, this is money the credit card wants to make but does not absolutely have to collect.

The last place to try to find room for negotiation is on your balance for goods and services that were directly purchased by you. Since you owe every dime of this money, there will be little wiggle room here. You purchased these things, and the credit card company paid for them. The only circumstance under which this amount might be reduced is if you let them know you are considering bankruptcy. They may think that getting something is better than nothing and be willing to cut you a deal.

When calling, keep in mind that the ball is in their court. Because of this, you should be as pleasant as possible to the person you are speaking with. They do not have to help you, and if you fail to treat them with respect and courtesy, you will get nowhere, fast. You can tell them that you realize that a portion of your credit card debt could possibly be reduced, but do not attempt to drive that point home by being pushy.

If you are not able to make progress with the first credit card representative you speak to, ask for someone else, possibly a supervisor. Be mindful of the fact that once you do this, the negotiation process is breaking down. The next representative, or supervisor, will likely be notified that you are being difficult. This will make the next person you speak to less likely to be cooperative.

These methods may or may not work. However, it is worth a few minutes of your time to see if you can indeed have your credit card balance reduced. If you have been a good customer in the past, you may just get lucky. One thing is certain, you never know until you try.

Take Action with a Debt Management Plan

debt management plan

Debt management plans are basically an agreement that is written to help struggling people pay their monthly repayments. They do this by offering a single monthly payment, which is usually more affordable.

These debt management companies negotiate terms on the interest. Usually ending up in freezes until the debtor’s outstanding accounts have been collected. This way, you don’t take any more interest on your loans, and you can start paying back the principal amount. This also stops any type of legal battle against the debtor. So you can kiss the bill collectors, goodbye. This is one of the best ways to tackle debts without trying to get another loan.

Debt management companies are the perfect type of people that you want to be dealing with creditors they can make it so you only have one low monthly payment. They also make sure to do a comprehensive analysis of your particular situation. And because of the efficient management of these debts and helps improve your credit score. Also, by making sure that a payday is never missed, late fees and penalties are a thing of the past. These debt solutions start with an accurate assessment of your situation,

Try not to file for bankruptcy. Bankruptcy ruins your credit, practically forever. There are much more workable debt solutions. If you have full credit cards, and loans and other debts then consider debt consolidation. That consolidation takes all of these debts and put them under one umbrella, which makes it far easier to pay off. This usually makes for a smaller monthly payment. And you don’t have to deal with multiple lenders like before, now it’s only a single lender. Your debt negotiations take place through experienced debt management expert on your behalf.

Getting rid of debt is actually quite a simple process once you use resources available to you. By taking advantage of these teams of people willing to help you further your cause of living a debt-free life. After working with these companies your credit score can be higher than what it used to be. This is getting rid of debt that tension-free way.

Debt Management Solutions That Work

debt management solutions that work

Everyone can get into debt at one point or the other.

The important thing is knowing when to ask for help.

The thing with debt is that most people keep it to themselves, thinking that it is an embarrassing and an even taboo topic to bring up to friends and family.

However, debt is something that should be taken seriously and when you find yourself deep in debt, it is almost impossible to get out of it without any help.

There are a lot of organizations that can help you manage debt. In fact, you just have to search online and you will find a number of debt management solutions that you can choose from.

There are debt settlement programs, debt consolidation, and even debt management, all catered to helping you get out of debt.

The question, however, is how to choose the debt management solution that works for you. Here are some of the most popular solutions that should help you out in choosing what could work for you.

Restructuring Loans: Debt Settlement and Debt Consolidation

You have two ways to restructure your loans. You can either go for debt consolidation or debt settlement. In debt consolidation, a finance company buys all your debts from your creditors and then sets up a new payment plan for you.

By consolidating all your debts, you now only have to worry about making one monthly payment and having to deal with only one interest rate. Most of the time, debt consolidation allows you to have less monthly payments with your debt spread out in a long period of time.

Debt settlement, on the other hand, is when you and your creditors get into a compromise about the total amount that you owe.

However, most creditors don’t deal with the person themselves but with a debt settlement company who will be the one to negotiate for a better deal in your stead.

Most debt settlement programs can take out 40-60% off your debt.

Debt Management

Another option that you can take is to get into a debt management program. A debt management program provides you with a payment plan to help you better pay your creditors but you won’t be paying your creditors, instead, you will be giving your payments to the agency and they will be the one to negotiate with your creditors.

Debt management plans work because they provide counseling to make sure that you don’t fall back into getting more debts.

Bankruptcy should be your last option. There are a lot of debt solutions offered to you so just make sure that you are dealing with a legitimate company and you should be on your way to achieving a debt-free lifestyle.

If you like this, you may be interested in this debt management article.