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10 Steps Toward a
Debt-Free Family
Has your family examined your finances lately? Are you shocked and
anxious about the amount of debt you have? Here's some help in 10 steps
for regaining financial control:
1) Seek help. If you're not sure how to proceed, or you're feeling
too overwhelmed to act for yourself, call a non-profit credit-counseling
program for advice and assistance in working with your creditors to set up
a repayment plan. Consumer Credit Counseling Service has offices
throughout the US. Call 1-800-388-CCCS, 24 hours a day, for an office near
you. You can also find information about debt problems from your local
church, library or bank. Look for information online as well.
2) Contact your creditors. As soon as you're aware you won't be
able to make a payment, contact your creditors. Creditors are more likely
to work with you if they're contacted before the payment is actually
overdue. Debt collectors are trained to solve payment problems, so don't
be afraid to be honest with them about your financial situation. Stay
calm. If you commit to paying the bill by a certain date, be sure you
follow through on that commitment. The creditor won't be likely to work
with you again if you don't keep your payment promises. If you can't make
your minimum monthly payments, write to each creditor individually and see
if you can work out smaller regular monthly bills. Be sure to explain to
them why you fell behind in your bills, your current income, your other
financial obligations and the exact amount you can pay them each month.
3) Cut up all credit cards and send them back to the issuing companies
immediately. Officially close all credit accounts. A temptation when
you start seeing lower balances on your accounts could lead you to charge
the credit limits right back up again if the accounts remain open. Don't
take out more loans or open any new credit accounts until back bills are
paid in full.
4) Set a frugal budget and live within it. It's usually easier to
decrease spending than increase income. Don't make any purchases above and
beyond the absolute basics until you've made some headway in catching up
on your back bills. Consider selling assets to find more money for your
debt repayment. Even holding a large garage sale can sometimes generate
enough money to help pay an immediate bill or two.
5) Prioritize debts. Mortgages, child support and any debts that
have gone to a collection agency are a priority. After you've identified
the first priority debts, look for the credit companies that are charging
you the most interest.
6) Pay each creditor something. No matter how small the amount
you're able to pay, it will show good faith on your part as you try to
negotiate payment arrangements.
7) Track personal spending. It's important to identify any holes
where your money is draining out. Keep a detailed record of every
expenditure for one month, no matter how insignificant. Little expenses on
a regular basis add up quickly. Carry a small notebook with you and write
down every single purchase. Now you'll know where your money's going.
8) Plug any holes discovered from the spending record. Small leaks
sink great ships…even financial ones.
9) Plan ahead for annual expenses (i.e.: insurance, car licenses,
medical deductibles, etc.).
10) Set long-term financial goals. After setting concrete, definite
goals for future financial health, make all current financial decisions
with your future well-being in mind. Keep the end result in mind—debt-free
living!
The key to getting your finances in order is to control spending and
funnel that money into retiring your debt in an orderly fashion. Make sure
that your debt is not growing, but shrinking a little every month. As your
debt disappears (and it will, if you keep after it!), plan to put the
money you have been putting toward debt reduction into a savings plan.
That money will start earning you money rather than paying off growing
interest payments. That will be a happy day!
If you feel like you might need some help achieving your goals click here
to apply online (free of cost) today for Atlantic Credit's Debt
Consolidation Program.
Source: Crosswalk.Com
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