Financial Planning Tips » Debt Management

Stop Living At The Edge Of Your Finances

FPT Guy — Mon, 06 Feb 2012 19:53:53 +0000

Too many Americans live at the edge of their income, which is one of the primary reasons so many people run up insanely large debts on their credit cards and fail to pay off their loans and mortgages. Prepaid credit cards are one way to curb your spending, as they can prevent you from spending money you don’t have and running up a balance that you have no intention of settling anytime in the near future. But reducing your spending is about more than simply not buying the boat or car you’ve had your eye on. It’s a more comprehensive lifestyle change that can be enacted by cutting down on your utility costs, prioritizing your expenditures, and investing your money safely. Here are some tips to bring you back from the edge, financially speaking.

Pay of your credit card balance. An outstanding credit card balance will cost you a lot of lost money on interest rates and will also adversely affect your credit score. Of all of the loans you may have, credit card card debts are the most detrimental to your financial status in the long run. Even if you can’t pay your balance off completely, increase your monthly payments.

Upgrade your home with energy efficient appliances. Renovating your home with energy-saving measures will save you hundreds of dollars on utility bills. Seal up leaks around doors and windows, insulate your attic, use duct sealant on heating and cooling systems, replace old windows, add storm windows and install a programmable thermostat to keep your temperatures practical. Combined, these measures will save you money.

Open a high yield savings account. Move your funds into a savings account that collects high interest. If you have good credit, most banks and credit unions will offer you a pretty good rate. If you don’t have enough to make your return sizable it may be time to cash out your stocks and put the money into a savings account or bond that will grow with time.

Sometimes it’s hard to know if you’re living at the edge of your income. A few good indications are unpaid credit card balances and loans. If you’re spending money you don’t have to pay for things you don’t really need, it may be time to reassess your financial situation. You may need to tweak elements of your lifestyle in order to reduce your spending, improve your credit score, and build a solid foundation for the future.

How To Stay Motivated When Paying Off Debt

FPT Guy — Wed, 23 Feb 2011 08:04:54 +0000

When you are working you way out of debt, it is often not difficult in the beginning. Picturing yourself as debt free can be thrilling for someone who has suffered under the burden of mounting bills for so long. If you do not plan to use debt consolidation services, you may even be excited as you come up with all the ways that you can cut back and start paying off everything you owe.

A month later the enthusiasm has died down or you may even have already forgotten your vow to change your life. You had a hard day and deserved a reward or you feel like spending a little extra money on coffee and you think dining out won’t make much of a difference at this point. Basically, you lost your motivation. You need to learn how to stay motivated when paying off debt.

Find New Ways To Enjoy Yourself

While once you used money to pave the way to happiness in every part of your life, now you are cutting back. You just need to remember that the fun in life can exist without you spending money. It will take a little effort at first but you can have a fulfilling, enjoyable life without paying for everything.

Begin with meals. While once you may have eaten at restaurants or at fast food joints, now you want to eat at home more. Of course, this is not going to be fun if you don’t put any effort into it. If, however, you learn how to cook your favorite meals at home then you can enjoy all the food you used to for a lot less.

The same goes for entertainment. It’s true that you won’t be able to go to all the same events and hot spots that you did while you were spending without a care but you can still have your fun. Search online or check the newspaper for free local events.

Many cities have free concerts in parks. Parks often have free programs for enjoying nature. Local libraries often sponsor free events. Tourists can find free things to do. So can you.

Stop Thinking About Debt

If every move you make is going to be made with the intention of paying off debt then how can you not think about debt? That’s easy. Every topic has two sides, a positive side and a negative side. When you think about debt you’re focusing on the wrong side.

If you’re always thinking about your debt then you will constantly feel discouraged. Focusing on your debt is not pleasant. It does not make you feel inspired. In fact, it makes you feel lousy. Who would want to keep up with a lifestyle focus that makes them feel lousy?

You need to be thinking about being free from debt. Even better, picture yourself long after your finances have recovered. See yourself always having more money than you need and enjoying the good life. See yourself in the life you want to have and you will always feel inspired. Do not focus on the aches and pains that you feel while running this race. Concentrate on that glorious moment when you cross the finish line.

Staying motivated when you are paying off debt is done by making life fun. Take your attention away from the negative and find new positive points in life to focus on. Staying motivated when paying off debt just means making yourself happy while you work toward a better life.

Debt Management As An Alternative To Bankruptcy

FPT Guy — Thu, 14 Jan 2010 22:52:49 +0000

Debt management plans and debt settlement programs are considered the leading alternatives to bankruptcy. They allow the borrower to gradually pay off debt on terms that are agreeable to both parties. At the same time as a debt free solution will result in a low credit score the implications aren’t nearly as serious as filing under chapter 7.

It is possible to avoid much of the stress and anxiety normally experienced when figuring how to get out of debt, provided that the right plan is chosen from the onset for proper debt consolidation. Whether a debt relief program should even be considered as a bankruptcy alternative depends heavily upon the borrower’s level of disposable income. Both a debt settlement program and a debt management plan will involve making a monthly repayment to an intermediary. If the borrower has lost their job and/or his little money available, neither debt free solution constitutes a viable alternative to bankruptcy. However, those who can afford to offer the creditor a realistic sum of money each month stand to benefit, and certainly could avoid repossession of their belongings by keeping up to date with payments.

Debt management can help you in a number of ways. It keeps the creditors off your back. They will call all of the people you owe money to on your behalf and talk to them about your particular situation. They will negotiate with each creditor to reduce the amount of the monthly payment that you owe them and they may even be able to help you get a reduced interest rate so that more of your payment actually goes towards paying off the debt, rather than paying more and more interest. Your debt management analyst can help you buy going over all your household and living expenses and helping you to come up with a realistic budget. This way you can clearly see what you are wasting money on and what you should be paying for things like groceries and eating out at restaurants. Often times we waste money on things that we don’t really need, especially when we are up to our ears in debt.

Your debt management company can help you out is by consolidating all your monthly payments into one. You send them the total amount that you are paying towards your debts and they disperse it for you and make sure that everyone gets it on time. This takes a lot of burden off you and you don’t have to worry about making sure everyone is paid the correct amount every month. If this seems like a viable plan for you then you should definitely go with a debt management program over filing for bankruptcy. A debt relief program like Freedom Debt Management is a lot less harmful to your credit rating and a bankruptcy will stay on your record for up to 10 years. Working with them can avoid you even needing to get help with repossession in case you are having trouble paying off a car loan. For this reason you should opt for the debt management program and get out of debt.

Bankruptcy services may not be the answer for everyone who is under financial stress. There are many alternatives and debt relief options to bankruptcy that may be available to you or your family members. I think that a debt management program is a good option – like Consumer Debt Solutions. In some cases they may serve as a good alternative to bankruptcy.

What’s A Good Credit Score?

FPT Guy — Sat, 03 Oct 2009 02:52:52 +0000

If you are in the market for a new car or maybe looking at buying a house, you may be interested in what your credit score is. Maybe you recently found out your credit score and you are wondering how it competes with others on the credit score scale. Perhaps you’ve gotten to the point where you’re asking “how can I improve my credit score so I can get better interest rates”? Before actually going into what is a good credit score, I am going to give a brief rundown of what exactly a credit score is.

It is a scientific and mathematical calculation that puts together many factors and outputs a score that is supposed to help determine if someone is good to loan money to or not. It combines two main factors, the situation your credit is currently in, and your past credit history. There are other factors, but those are the main ones.

Each of the 3 different credit bureaus, Equifax, Trans Union, and Experian all determine your credit score in different ways, but they all use the same system, the FICO (from the Fair Issacs Company who developed the scoring model). The score range from around 400 to a perfect 850. The average credit score is around 670, and anything above a 700 is considered a “good credit score range”.

You may be wondering how to get a good credit score or perhaps even an excellent credit score – or a perfect credit score. Well, you can do a few things. The first thing is to not make any late payments at all. Do what you need to do to ensure that all of your loans and debts are paid on time, every single month – so you’ll never face the music of having to fix bad credit problems. That will help to establish a good credit history, and allow future lenders to know that they can expect to be paid on time if they loan to you.

Another key is to reduce your total debt. If you take your available debt (the max amount you can have on your credits), and if your current debt is more than 50% of that number, then your credit score will be lower. Work on reducing your debt so that it is below 50% of your available debt, and perhaps consider using some kind of debt relief program to assist you with debt reduction. This will help to contribute to a good credit score and a good credit report.