Do you want to Get Out of Debt FAST?

Here is one of the most frequently asked questions we get: “How do I get out of debt?” The answer if pretty basic. Eliminating debt is about following a few simple steps:

1. Stop going into more debt
2. Spend less than you make
3. Pay off your debt with the difference

This sounds simple enough, but the problem is that following these steps isn’t always so easy.

In fact, tackling your debt may be one of the hardest things you’ll ever do. You have to control your emotions. You have to educate yourself about everything from home loans to credit cards to credit scores. And you have to discipline yourself in the way you manage and spend money. The fact is that controlling your spending and paying off your debt is not an easy thing to do. But the good news is that you can do it. If you want to be debt-free bad enough, you can make it happen.

And to help you reach your goal of being debt-free, I’ve assembled a list of tips to GET OUT OF DEBT FAST.

Part One: Get to Know Your Debt

The first step in tackling any problem is to fully understand it. When it comes to debt, you should know everything about the terms and conditions of the money you owe. Here are some tips and tools to help you understand your debt.

1. Put Your Debt On Paper: The very first step is make a list of the debts you have. The list should include the following information: The name, address and phone number of the creditor; the outstanding balance; the interest rate; the minimum payment; and any other information you feel is important.
2. Take Advantage of Personal Finance Software: By now many people already have and use personal finance software like Quicken or YNAB (You Need a Budget). If so, you can use the tools within the software to record all of the debt you owe and to develop a plan to pay off that debt.
3. Use Free Online Tools: There are many budget tools available online for free. These tools can track your debt and are easy to use. And it’s hard to beat free!
4. Involve Others: It’s important that your spouse or significant other is involved in the process. If you don’t see eye-to-eye on finances, it can make getting out of debt even more difficult than it already is. It’s not uncommon for one spouse to take the lead in handling finances, and that’s fine. But you both should be on board, particularly as you develop a plan to tackle the debt.

Getting to know your debt is just the first step you need to take to get out of debt fast.  Check in tomorrow for the next step...Create a Plan.

Got Questions? We've Got Answers

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photo by: alancleaver2000

Coping with financial stress is not only possible, but may help put you back on the path of financial stability!

Let's face it, we are living in one of the most financial challenging times of our history.

• Unemployment is at an all time high
• There never seems to be enough money at the end of the month
• Retirement savings at an all time low

Someone has said that FEAR is really:

• False
• Evidence that
• Appears
• Real

Here are 3 Tips on how to cope with Financial Stress:

FIRST: As bad as your financial situation seems, it is probably not as bad as you think!

There was an article from ABC News that really nails the problem:

Don't scare yourself with "what if" scenarios. Don't tell yourself panic-inducing stories about the future, because you'll begin living in this catastrophe that hasn't actually happened. Instead, look to the past, at the stories of how you've rebounded before. We're in a time of incredible uncertainty but the future is never certain -- remember the tough times you've made it through before.

You can probably recall tough times before and somehow, someway, you made it!  YOU CAN DO IT AGAIN!

SECOND: Determine exactly where you are financially.

If you haven't done so, you need a very complete budget.

I know, things may seem so bad that you may be thinking, What's the use?", but you have to know! 

Remember?  FEAR =  False Evidence that Appears Real

Once you know how much you have coming in (net take-home from all sources) and how much you have going out, you can start to deal with the problem or at least free up some outgo that you most likely can live without each month:

• Daily Starbucks ($3 for a cup of coffee x 5 days x 4 weeks = $60)
• All the extra channels on your Cable TV (you may save $25-$35)
• Going out for lunch each day ($10 x 5 days x 4 weeks = $200 !!!)

And there is probably more, but you get the idea. 

You could free up a coupld of hundred dollars without too much pain or sacrifice!

THIRD:  DON'T BE TEMPTED TO USE (OR KEEP USING) YOUR CREDIT CARDS!

I know the rational behind using credit cards to make up for lack of income, but in the long run, you are just charging your way into a black hole that you may never recover from.

But if you have serious credit card debt, what can you do?

There are several programs available and you should request a FREE CONSULTATION to determine if one would work for you.

Learning how to cope with financial stress is not impossible.

Remember these 3 tips:

1. Your financial situation is probably not as bad as you think.
2. Find out EXACTLY where you stand financially.
3. Don't be tempted to use those credit cards!

Fianlly, if you are being harrassed by collectors, click below for free information:

photo by: anitafrances

What's your new years resolution? If you're like most people out there you have probably vowed to exercise more, spend more time with family, or even simple learn something new.  I did a little research and one of the top ten new years resolutions being made of 2011 is to become more financially stable.

Here are my top 5 tips to get you financial success in the new year!

#1 REVIEW YOUR CREDIT REPORT - Much of your financial future depends on the contents of your credit report. It is incredibly important to obtain your report, review it for accuracy and dispute any errors. Everyone is allowed one free report from each of the three major bureaus once every twelve months. You can access all three of your credit reports at www.annualcreditreport.com. 

#2 REDUCE YOUR DEBT - If you’ve dug a deep financial hole, stop digging. Piling new debt on top of old is a red flag that you are living beyond your means. Lock up the credit cards until they’re paid in full.  If that is not an option, or you need your credit cards just to maintain your monthly bills, you might need the help of a trained Debt Solutions Specialist.  They can help you determine what options are available to you and work with you to eliminate your debt fast!   

#3 TRACK YOUR SPENDING FOR ONE MONTH – Have everyone in the household participate. Write down every penny that is spent. It’s the small, miscellaneous expenses that often wreck the best of plans. At the end of the month, come together to review your spending. This is the only way you can truly know where your hard-earned money is going.

#4 MAKE A SPENDING PLAN – Once you’ve tracked your spending, you can then make decisions as to how you want to allocate the money. Continue tracking with the new plan in place. Keep doing so until you find a plan that is right for your family. Click on the link below for a FREE BUDGET WORKSHEET!

#5 COMMIT TO SAVE -  If you are anything like me, you are great spender and a lousy saver. However, without a well-funded savings account, you are on a very slippery slope, one that becomes treacherous with the next unplanned expense. Put 10 percent of each take-home check into a savings account. Make this a non-negotiable bill and have it automatically withdrawn from your checking acount. You can also find extra money to dedicate to saving by putting all raises, bonuses, birthday checks, into savings. This will create a cushion that should see you through most short-term emergencies.

Good luck on becoming financially organized in the new year. Let's talk next year and you can let me know just how well you did!

If you need help with your credit card debt, you are not alone.

Many people, just like you, face a financial crisis from time to time.  It could be caused by personal or family illness, loss of job, cut in pay or just overspending.

As bad as it may seem, it can be overcome.

The first step you must take is to get a realistic financial picture of where you are.  It does not have to be complicated or too exhaustive at this point, but you have to know where you stand.

You may want to use a simple Household Budget that will help you determine your total income and outgo.

In a time of financial crisis, you need to ask yourself some tough questions:

• Do you really need all the "bells and whistles" of your cable TV?
• Can you cut back on your heating/cooling/water and other utility bills?
• What about miscellaneous spending?  Do you really need to be spending $5/day for that latte? I know, but...
• How about putting a hold on that gym membership you rarely use?

Starting to get the idea? 

If you find out that there is just not enough money at the end of the month to pay all of the bills, you must make some tough decisions.

There is a HUGE difference between SECURED and UNSECURED debt.

Secured debt includes things like your mortgage, auto loan and possibly furniture or appliances if you financed through a finance company.

Failure to pay these debts could result in foreclosure or repossession.  So, make sure these are your primary bills that have to be paid each month. 

Your unsecured debts including credit cards, personal loans, any debt that is not secured by collateral, can be treated differently in time of crisis.

This is not the time to be overly concerned with your credit score!

We're talking about survival here.  The credit score issue can be dealt with later!

If you can service the secured debts, but there is not enough for the unsecured debts, contact each of those creditors and ask for a lower payment and/or interest rate.

Some creditors will work with you, but don't be surprised to discover that they really don't care about you or your situation!

If that is the case, you may want to contact a professional Debt Management Company to help.

You may qualify for a Debt Management Program or a Debt Settlement Program.  A qualified company will go over you situation and budget very thoroughly before making a recommendation. 

Be aware that most companies only offer one solution.  No one program will fit every situation, so be very careful.

In a Debt Management Program, each of your unsecured creditors will be contacted and a lower payment/interest rate will be arranged.  You will have ONE MONTHLY PAYMENT and it will be disbursed to each of the creditors accordingly.

These programs will usually take 48 months or so, but each of your debts will be repaid and you will not be receiving calls from collectors.

If you do not qualify for the DMP, then the Debt Settlement Program may be your best option.

In the DSP, negotiations will be made with each of your creditors for a reduced amount.  As you cannot afford to keep paying the monthly amount, these accounts will ultimately charge off and go to a collection agency.

You will receive phone calls which can be very annoying, but there is a way to stop these calls. Click here for a FREE REPORT.

These amounts will vary, but should be around 50% of the balance at the time of settlement.

Of course, you will need to set aside an amount your budget can handle to have funds to negotiate, so make sure you can be disciplined to make those deposits each month.

If after going over you budget and examining your options, you may be forced with the ultimate decision of seeking bankruptcy protection.

You should consult a bankruptcy attorney to find out which plan would be best for you.

Regardless of which option you choose, taking control of your situation will help put an end to the worry and frustration that financial pressure brings.

Most people find that after going through all of the steps above and choosing the appropriate solutions, it was not as bad as it seemed.

• My bills are piling up.
• I can't make the minimum payments.
• I have too much credit card debt.
• What can I do?

You have maxed out most or all of your credit cards and due to circumstances beyond your control:

• Loss of employment
• Sickness
• Emergency expenses
• Divorce
• General economic recession going on...

There is just not enough money to pay the main bills like the rent or mortgage, food, utilities and/or medical or medicines...not to mention to pay off the credit cards.

What now?

The first step is to get a clear picture of exactly where you are financially.  A simple budget spreadsheet will really help. 

I know this is scary and most people avoid know "how bad things are", but you need to know.

Knowing where you are may reveal:

• You're not in bad a shape as you thought
• You're in worse shape than you thought
• Regardless, you'll know what you have to start attacking the problem!

Let's say after listing all net (after-tax and other deductions) you have $150/month to use toward paying off credit card debt.

The problem is, the minimum payments total over $300/month!

Options:

You can call each of your creditors to ask for a lower interest rate and payment so that your account will not go into default.

WARNING!  Creditors don't usually care about your hardship and may not be willing to help. If they will change the interest rate and lower the payment to fit your budget, great. If not...

Consider contacting a Debt Management Company to see if you would qualify for a Debt Management Program (formerly referred to as Credit Counseling).

If you do not qualify (payments would still exceed $150), then you should consider Debt Settlement.

After an account is delinquent more that 120-180 days, most creditors will consider settling the account for less than the full balance.  The problem is that they want 50%-75% of the balance and they want it now! 

Of course, if you had a couple of thousand of dollars on hand, you probably wouldn't be in trouble in the first place.

In some cases, they may consider a term-settlement plan, whereby you agree on a settlement amount and then a payment over several months.

Again, most creditors will tell you they cannot do that and that they would need all of the money in 6 months or less.

We have been helping people settle accounts for many years and have documented proof that they will indeed take a term-settlement for longer than 6 months.

If you cannot negotiate a reasonable settlement, then you should consider contacting a professional Debt Settlement Company.

For a Free, No-Obligation Review of your situation and possible solutions, click here.

Check out this great video with a few simple steps to create a budget!

Step 1: Have a goal!

Step 2: Make a plan!

Step 3: Track every dime you spend!