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HomeBlog Debt ReliefIs It Better To Earn More Or Spend Less During A Debt Crisis?
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Is It Better To Earn More Or Spend Less During A Debt Crisis?

August 14, 2013 by National Debt Relief

woman hammering a dollar signIf you think that we are out of the debt crisis, think again. This is not to scare you or anything but you should not allow yourself to be lulled into a false sense of comfort because we are not out of the debt pit. It is probably true when the government tells us that the employment rate is getting better but you have to know that we are not yet out of the danger zone. If you look at the US Debt Clock website, you will see just how much our debts are still rising.

Of course, there are several sources that contributed to the figures but the point in fact is, we still have a long way to go.

In our own personal lives, we each have our own financial difficulties and if you are still going through a debt crisis, you are probably looking for a way out of it. Well here are two things that you can do: earn more or spend less.

The logic for this is to grow your debt payment fund so you can get out of debt a lot faster. You want to keep the interest amount on your debt low and that can be achieved if you pay off the debt quickly. It can save you a lot of money especially when you are dealing with credit cards.

However, the question on people’s mind is this: should you concentrate on earning more or spending less?

Why increasing your income helps in debt relief?

Some people think that earning more is a lot better than spending less because of the following reasons:

  • There is no limit to the amount that you can add to your funds.

  • You don’t have to change your current lifestyle.

  • The children are shielded from the debt crisis as you are absorbing the burden by doing more work.

  • You can build up your funds not only for debt payments, but also for your savings and even some investments that will grow your personal wealth.

There are so many options to earn more money so you can pay your dues. If this is where you want to concentrate, it helps to find a way to do so without exhausting your physical and mental self in the process. That is the drawback in choosing to increase your income. You will have to exert more effort just to supply the needs of your family and the debts that you have accumulated over time.

Another drawback is that you most likely will not learn your lesson. Since you  are not changing your lifestyle, you will continue with the extravagant way of living that got you in debt in the first place. If you are not careful, you could end up in the same situation even after you have gone through all the debt relief efforts in the past.

What can you learn by lowering your expenses while in debt?

On the other hand, trying to lower your expenses instead of earning more will provide you with the following benefits:

  • You are forced to live below your means – which will decrease the chances of you getting yourself in debt again.

  • You will learn how to budget.

  • You learn how to choose where you spend you money on – thus eliminating all your bad spending habits.

  • You create a new lifestyle for the family that will teach all of you how to value your money.

If you choose to focus on decreasing your spending, that will give you a limited increase in your debt payment fund. That is the drawback for this option. There is only so much that you can cut back on and this will keep you from getting out of debt a faster. Not only that, you may lose the chance of putting some money into your savings.

Which of the two gives better results to help with debt?

At this point, you can probably figure out what the solution is right? The answer to the question, which of the two: earning more or spending less, can help you best with debt relief is already irrelevant. You need to combine the two so you can become debt free.

If you use both, you don’t have to work too long in order to meet your payment obligations. The savings that you will get by cutting back on your usual expenses will add to what you can send towards your debt. More importantly, spending less will help you (or force you) to practice the right habits that will not only get you out of debt faster but also keep you from landing in that spot again.

In the end, what is important is what you will learn out of this situation. Given that, you know that spending less is the better option. However, to keep your life from being too miserable, you need to increase your income so you can still afford to enjoy the finer things in life.

The bottom line is, if you really want to keep your debts from getting worse, you need to spend less than what you are earning. Here is a video that you can watch to help you understand how to accomplish that.

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National Debt Relief is one of the largest and best-rated debt settlement companies in the country. In addition to providing excellent, 5-star services to our clients, we also focus on educating consumers across America on how to best manage their money. Our posts cover topics around personal finance, saving tips, and much more. We’ve served thousands of clients, settled over $1 billion in consumer debt, and our services have been featured on sites like NerdWallet, Mashable, HuffPost, and Glamour.

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Moderate National Debt Relief Caller: Charlotte Transcribed WE 1/24/2021 Charlotte: Before I begin, I have to let you know that our call may be recorded. Can you tell me, how did you first hear about our National Debt Relief? JOAN: Oh, I don't know. I don't remember. I don't know how I heard about it. Charlotte: What made you decide to work with them? JOAN: Well, obviously, I needed to consolidate my debt. Charlotte: Tell me about the service program that they provided you with. JOAN: Well, I'm not done. But for me, it’s costly. What I did not like about it was that they add on. They say it's going to be X amount of dollars. But then what they do is they say, “Oh, well, we found another creditor that you need to…” So that'll be at a different part of the month and I don't like staggered bills. If I'm gonna pay a bill, whether it's to the phone company, the insurance company, whatever it might be, I want to pay that bill once a month. That's the only drawback. Charlotte: So let me get this. Normally, they are collecting the bills upfront. And then they work to get them paid off at a different rate. So everything wasn't collected all at once, if that's what I'm hearing correctly. JOAN: No, no, no. Every month, money is taken out of your account. And they pay X amount of dollars. Like let's say you owe $5,000 with Citibank, $500 in Credit One, whatever. They work out a deal with them and then they say, “Well, you have to pay $350 a month.” And they'll pay $20 a month towards -- they give you like around about how long it's going to take. Two years, two and a half years. And then they work it out that way. Charlotte: Now, what did you think about your negotiator? JOAN: I don't know. I just called up. It's a completely different department. So when you call up to sign up, it's very different. I don't remember that. It's just that they collected all the information. It was easy for me. I didn't have to go through and find whatever bills I wanted to put in the debt relief. They did that. Charlotte: So say you have questions or concerns. How did you get your questions or concerns addressed? JOAN: I would just ask and they answered it. They're very helpful like that. They'll answer any questions you have. And if they don’t know, they will find out. Charlotte: So was there not a particular person that you spoke with? JOAN: No, you don’t have one person that you deal with that just handles your account. Once you do – they’re like headhunters. Until you sign up, you're going to have that one person and even other people calling. Once your name is out there, they're going to keep calling you. So, once you sign up, then it's whoever answers the phone. It’s customer service. Charlotte: How comfortable did you feel working with National Debt Relief through this process? JOAN: I felt very comfortable, very safe. I was not worried about anything. Charlotte: Is there anything about this process that you would have liked to seen handled differently? JOAN: Yes. The way the payments come out. I'd rather have them one instead of … Charlotte: Everywhere. JOAN: Right. Well, not everywhere. For the most part, the bulk of them were. But then if there's one here, one there, they don't just extend it to another payment. And then the payments change, like the payment amount. You could pay $20 for six months, and then all of a sudden, it's $80 for the next three months, so you really don't know. Charlotte: So if you have to rate this experience on a scale of one to five, five is you’d recommend to friends, one you're pretty dissatisfied… JOAN: No. I would definitely recommend it to a friend. Charlotte: How would you say working with National Debt Relief has impact your life? JOAN: Well, it did help until I hit a speed bump. I'm in the middle of a divorce and my husband closed our checking account, of course. But so far, as a matter of fact, that's why I thought you were calling. I have to postpone the next month, so hopefully, they'll be able to postpone it, because I've been postponing it for a few months. Charlotte: Would it be okay if I posted your comments as a review on our public website for National Debt Relief? Because you did give us some really good feedback. JOAN: Yes, but not using my name. Charlotte: Okay, I will make it anonymous for you. I will also send over a link so that you can have it as a record for yourself at jdola20@yahoo.com. JOAN: Yes, but do not put that public. Charlotte: Oh, no, no, no. That doesn't go public. Definitely. How would you say working with National Debt Relief has impact your life. JOAN: Well, really, it would have helped if I could have stayed on the program. Charlotte: We’re recorded.

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