If you’re having a terrible problem with your debts, it can affect your entire life — including your family relationships.
We know you want to get out of debt, but you’re having a hard time figuring out how to get started.
Well, take heart.
Here are seven good and proven tips that will help you get started and get those debts under control this year.
Tip #1: Learn from 2016
If you’re struggling with debt, the first thing you need to do is learn from last year. You need to sit down and reflect on what went well with your finances, and any actions you took that made things better. Were you able to pay down some of your debt? Were you able to save more money? Were you able to pay cash for a major purchase? And were you able to overcome any financial hurdles?
The reason for this review is to learn what things went right for you in 2016 that could help you set some specific goals for 2017. This means making a list of both your successes and those areas where you came up short.
Tip #2: Review these areas
Step two in dealing with your debt is to review areas where you could’ve improved or done better. You need to think about what changes you could make and why It is you have so much debt. Did you not keep your spending in check? Did you have high medical bills? Did you not earn enough to support a decent lifestyle?
Tip #3: Make some resolutions
Once you’ve figured out why you have so much debt, you’ll need to make some resolutions for doing better in 2017. For example, if you don’t have an emergency savings account, you need to open one. This account should be separate from where you do your normal banking and have no ATM card, so you would be forced to go to the bank’s branch if you want to withdraw money.
While experts say you should have the equivalent of six months’ living expenses in your emergency savings account, you would probably find this almost impossible. Your goal should be three months’ living expenses, but in the meantime try to save up at least $1,000 as this would get you through most financial emergencies.
You may have already learned some things about personal finance through trial and error. But you should also get some books on the subject, subscribe to a magazine like Money or start reading blogs like National Debt Relief. If. If you devote just 15 minutes a day to studying personal finance, you should do much better in 2017.
Tip #5: Learn where you stand
The next thing you need to do is pull your credit report and credit score. This will help you see exactly where you stand financially. You can get your credit report free from each of the three credit reporting bureaus (Equifax, TransUnion, and Experian) or all of them together on the site www.annual credit report.com. You can get your credit score free from sources like CreditSesame.com, CreditKarma.com, and the Discover Card website.
Tip #6: Check out your options
Check out the options for dealing with debt. The first is a debt consolidation loan. If you have decent credit, you might be able to get a personal loan and use the proceeds to pay off all your debts. The advantages to this are that you would have a lower monthly payment than the sum of the payments you’re currently making, and you’d only have one payment to make a month, which should be much easier to handle.
If the majority of your debt is credit card debt, a second option is to transfer all their balances to a new credit card with a lower interest rate. If you still have a reasonably good credit, you might qualify for a 0% interest balance transfer card, which would give you as many as 18 to 21 months interest-free to pay off its balance. This could be enough time for you to completely pay off the debt.
A third option would be to go to a non-profit consumer credit counseling agency for help. If you do this, you will be assigned a credit counselor who will develop a debt management plan (DMP) designed help you become debt free in four to five years. You would also have just one payment to make a month to the credit counseling agency, which would then distribute the money to your creditors.
The final option, which has become increasingly popular over the past few years, is debt settlement. This is where you hire a debt settlement company like National Debt Relief you owe. In fact, in many cases a good debt settlement company can get your debts reduced to a fraction of what you owe. Plus, you would then have only one payment to make a month, which again should be less than the sum of your current debt payments.
More tips for controlling your debts
If you’d like more tips for managing your debt, here’s a video you should watch.