Debt Management 101
For many people, keeping their debts in order is quite the ordeal. Aside from having to come up with the money, there’s also the pressure of meeting payment deadlines and ensuring the rest of your finances on the up and up.
Fortunately for you, if you’re struggling financially due to insurmountable debts, there are ways to both quell the stress and even lower the amounts you owe, and here’s how:
Get a Credit Report
First and foremost, you’re going to need to figure out where and what you owe. An easy way to do this is by obtaining a credit report. There are many different companies, and even free websites, who are more than willing to help you out with this. But, there are a few things to keep in mind before doing so.
- Although glossy adverts for free credit reports are in abundance on late night television, don’t fall victim to the hype. The reports may technically be free, but the fine print often requires subscriptions to credit monitoring services, that if you don’t cancel, can result in all kinds of monthly charges.
- On a similar note, rather than paying to get your credit score, take advantage of the free reports available to you thanks to the Fair and Accurate Credit Transactions Act. According to the legislation, all consumers are able to get one free credit report from each of the Big 3 credit bureaus every year.
- Other than that, make sure you keep up with your yearly reports, and if you haven’t ordered one before, it’s better to do so sooner than later!
For those of you that owe lots of different debts to lots of different people, consolidating them into one lump sum is a great way to get a better handle on your finances. It can be a little daunting to see all of your total debts compiled into one big pot, but the benefits of doing so definitely outweigh that uneasy feeling.
- Instead of amassing several different interest rates with several different debtors, debt consolidation allows you to pay one interest rate to one party, which in most cases, is much cheaper than the alternative, thus saving you more money.
- Debt consolidation also makes it a lot easier for you to keep track of what and when you owe since it will all be in one place. This will allow you to organize your finances more efficiently and meet those monthly payments without having to break the bank.
- Once you have your debts consolidated though, it’s important to remember that you aren’t out of the woods yet. Consolidation is a great way to get organized, but once you are, it’s up to you to make your monthly payments on time and in full.
Another option for all you debt-laden people out there is to settle them altogether. Debt settlement is a little bit riskier than debt consolidation, but when done correctly, and with the right people, it can provide tremendous results. If you’ve never done it before, here are a few ways you can better your chances of it working in your favor.
- If you’ve never tried to settle your debts before, teaming up with a financial advisor or a similar professional is highly recommended. They’ll not only be able to field your questions, but also speak to your creditors at a higher level.
- Another tip for all the other firsttime debt settlers is to make sure that it’s the right choice for you financially. It can be a fruitful option for many people, but be sure to consult with your bank before you make any drastic decisions.
- Remember that debt settlement requires a bit of finesse. More often than not, you’ll be fighting an uphill battle with your creditors, but if you have a gameplan and some people on your side, it will definitely help your chances.
As you can see, when it comes to debt management, you aren’t without options. There are plenty of ways you can get your finances back above water, but it will require a great deal of effort on your part. However, once you put the work in, there will be nothing stopping you from getting back on the path to financial freedom!
Frank McCourt is a purveyor of financial advice, and southern fiction, and hopes one of the two will help pay the bills.