Drift of Being Thrifty - Debt Controlby Alfred Mia
Consolidation is nothing but the process of negotiating the rate of interest that will ultimately determine by how much the borrower's payments will be reduced and what his overall settlement will look like.
So any money above and beyond your normal payment is applied solely towards the principle of the loan.
Having trouble paying your bills? Getting dunning notices from creditors? Are your accounts being turned over to debt collectors? Are you worried about losing your home or your car?
You¡¯re not alone. Many people face a financial crisis some time in their lives. Whether the crisis is caused by personal or family illness, the loss of a job, or overspending, it can seem overwhelming. For many Americans debt is an overwhelming problem, a stressor that can quickly take hold of one¡¯s life. When there are bills attached to house, boat, automobiles, college tuition, and daycare, it¡¯s not hard to imagine that many folks can quickly be swept under the current of spending which can unexpectedly whirl into deep debt.
Lifestyle Changes You Need for a Debt-Free Life
Too many temptations in this world lead to being piled with insurmountable debts. Advertisements tell us that with credit cards, nothing's impossible. Salespeople and credit businessmen tell us that it won't hurt to have a debt here and some debts there. Little do we know that debt could actually lead to death! It's POSSIBLE to DIE from DEBTS. How, you may ask. Ever heard of suicides committed just because one has too much debt that that person could not think of any other solution but to get out of his debt-laden world through killing himself? No? You're not reading enough news, I'm telling you.
So, how do you avoid being victimized by debts? Learn a thing or two from the following bits of advice on how to manage a debt-free life:
Get the Drift of Being Thrifty
One major way to avoid having debts is to have enough money for your needs and even for your wants! How? Aside from landing a high-paying job, being a savings-savvy person at the same time is the solution. But what if you don't have a quite well-paying job? Knowing how to save up will still help you in your goal. Here are some simple tips:
Reduce debts today for a better life! Budgeting well whatever amount of money lands in your wallet every payday should be one of the major goals of a debt-free life advocate. You have to evaluate yourself to know what type of budgeting will suit your tolerance and lifestyle. Do you need a daily budget scheme? How about a weekly or a monthly one? You cashflow will be better monitored if you list all of the your expenditures and actual expenses. Brown bagging should become a common practice if you are to make yourself debt-free soon. Now if you haven't fallen for the culprit yet and you are just so not into the food you prepare yourself, consider compromising. Instead of bringing a lunch box of some sort, learn to drink your office coffee so that you have enough moolah for your lunch.
If you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a "debtor." If you fall behind in repaying your creditors, or an error is made on your accounts, you may be contacted by a "debt collector." If you have debt and that debt includes two or more monthly payments to lenders at high interest rates, you do not need to be held hostage by burdensome repayment plans. Combine what you owe with a debt consolidation loan and watch your monthly payments and overall debt drop dramatically.
Individuals or families in debt run the risk of loosing their home, vehicles, or other assets. Many of those who do not own a home or other obtainable assets are likely to never be able to own one. If you do not have a savings, account open one. Make sure that the account does not have fees or interest rates attached. If you have difficulty-managing money you may want to open a Paypal account and apply for a debit card online. This account not only protects you against identity theft, it also makes it difficult for you to get money right away. Put your debit card where you can't find but in a safe place.
You should know that in either situation, the Fair Debt Collection Practices Act requires that debt collectors treat you fairly and prohibits certain methods of debt collection. Of course, the law does not erase any legitimate debt you owe. There are a number of different types of debt consolidation loans: home equity loan, line of credit, or second mortgage.
Coupon clipping is a good move, too. This will not only make you help save but can earn you some friends too that may support you in your debt-free life campaign. How? Look for other coupon-clippers and trade.
Do you know how to save on phone services? If you need to make long distance calls, don't be sweet-talked by the smooth operator. Asking for help from the operator means having to spend more. If you use phone cards, check the expiration date and know if there are any hidden charges. Club memberships that are rarely used should be dumped, too. What could be more stupid that wasting money on things that don't get used, right? Speaking of rarely used things, how about stopping credit card use all at once? Learn to afford not swiping that evil card if you want a debt-free life. It's one of the biggest temptations in this world!
Distinguish the Evil Forms of Debt
There are two kinds of debt. The good one is that kind of debt with which the item that caused your debt could be sold and the proceeds could help you repay the debt. The bad one is a loan that has a diminishing value. An example of a good debt is a home loan that is if such home loan, particularly a home equity loan will add value to your home but if you will acquire such loan for unnecessary items, you're doomed. An example of a bad debt is clothes, unless you're a celebrity of course, wherein you can auction off your clothes when you get tired of them. School loans aren't advisable because it will most likely be hard for someone to pay off his or her debt even after landing a good job since there are various expenses that will come when working life starts.
So, how do you stay debt-free or at least be able to manage well your debts through the abovementioned information? Avoid bad debts!
None of this would be possible without taking the first step. Start tracking your spending habits today and tailor your moves to your debt-free life goals. Self-discipline will help you breeze through it all. However you got into debt - unexpected financial difficulties, illness, loss of providing member of the family or overspending - you can turn to several organizations and charities for advice.
Get the best interest rate you can if you opt for debt consolidation. This interest rate is almost as important as the one on your mortgage, but much harder to change after you've signed on the dotted line.
In addition, the major credit card companies, at the urging of the Federal government, have recently doubled their minimum monthly payment to about 4% of the outstanding balance.
Many people are looking to consolidate debt online because they're short on time and money. However, it's important to proceed with caution. Take the time to explore what's available and decide upon the best course of action for you.
About the Author
Learn ways to reduce your debts today at http://www.reduce-debt.info