Taking The Stress Out Of Debt

If you have debts or bad credit, the last thing you need is more stress in your life. Therefore, when you are having the time of your life, why not levying some time and take some preventative steps? Simple steps that will put you in better shape or that at least show you are being educated and proactive towards managing your affairs. All it takes is some time and sound financial decisions to take. Here are some of the easy steps that you can take right away.

Analyze

Sit down and look at your current financial situation. Trust me, it won’t be pretty. Review your income, your debts (if any), your repayment plan, and see how much you can put towards repaying your debts every month. Speak to your creditors to see if they can make any arrangements to help. Remember, a little help is all it takes to get you out of debt. Again, you must speak to representatives of the lenders instead of your debt collection agency. By sitting down and talking to your creditors, you can be more successful in reaching an agreement whether it is a debt management plan or a bad credit loan. Unsecured lenders such as credit card companies may be more willing to negotiate. That has as much weight as it is ever going to carry with a credit card company. Make it clear from the outset that you really do want to repay your debts and to come to some agreement. This can also work for business debt according to Sam who is a Piano Mover.

Contact your bank

This may not be the first thing you do as the first impulse of somebody who owes the money is to pay them back as quickly as possible. However, if you don’t have any debt, you probably do not need a bank account either. You can still contact your own bank and ask whether they can manage your payment. In the case of personal loans, your bank may help you to fix the loan where the interest can be reduced and the repayment term extended. If you are sitting on the bank’s loan, it would be wise to take this as a priority debt. Then you should cut up all but one account of your bank. You can also contact the local tax office for help.

Set up a budget

If you do not mind receiving mail from your creditors, sit down and write out a set of categories. The categories are family, household, groceries, medical, loans, utility, transportation, entertainment, savings, and miscellaneous. Place a value on each of the categories by calculating their value in six figures. This just acts as a visual reminder in your head of all the money you are dealing with. For example, if you have a budget of $2,000 per month and you have six debts at £$,000 each that comes to $40,000 per month. You will now be looking at possibilities of paying over that amount for a little while. You may have to do some ethical and moral counseling to accept to pay that amount. Once you have done this, you will have the money you need for your budget. Create a plan where you reimburse your debts immediately and so that you do not have to pay interest to suppliers that you cannot payback. For instance, if you pay £25 per month as repayment, you need to set a system of 10% and stick with it each month. By arranging a repayment plan with your debtors first, you can be assured that all interest will not eat up too much of your money. You can also keep track of how much is being paid towards repayment each day, you can check your progress online and when suitable, you could be re-arranging your budget. You will find that you end up being able to repay your debts with little problem and be back on a budget this quickly. If you have any debts, do not just move them around.

If you do not have a credit card, it is a good rule of thumb not to ever close it. There are special circumstances that may cause the need to do this, however, for the majority of us, it is just a good rule of thumb never to spend anything on credit that you do not have the money for. It is not always possible to allocate the money for something when you are on a credit card and you need to remain within your budget of your actual income. If you close your credit cards, you may find it harder to resist temptation, and this is not a good technique that will help you to become more enterprising and budgeted and will keep you focused on becoming debt-free once you eliminate your debts.