Most people nowadays have a lot of consumer debt, which is becoming a great burden to the quality of their lives. If you are suffering under the weight of such debt, the only realistic solution is to take control of your financial management.
There are many well thought out ideas that you can adopt in order to plan your way out of the debt. Adopting a debt management program that can employ different debt relief programs such as debt consolidation, debt settlement, and interest arbitration can be very helpful.
Once you have created the debt management plan, you will then have to stick to it all the way to the end when you complete paying for all your debt. This makes it very important that you create a plan that you can stick to.
Below are some of the steps you would take in order to start taking control of your financial management and get out of debt.
1. Find Out Your Real Financial Status
Collect all your notices, bills and everything that will help you find out exactly how much you owe to all your creditors. Include your mandatory monthly payments such as rent or mortgage, groceries and other household expenses. Balance this off by finding out what your discretionary income.
2. What is the Anatomy of your Debts
Find out:
- How much interest do you have to pay on each loan?
- When are the debts due? and
- How long do you have to pay for each debt?
Such questions will help you understand just how indebted you are and help you plan better.
3. Find Out Your Credit Score
Get a credit score report to find out what your official financial status is. This will help you to know the information that financial institutions have on you when you need to negotiate.
4. Do Some Damage Control
Get rid of any credit cards that will land you further into debt. If you can, consolidate your credit card payments into one card that has the least interest. A zero interest credit card is most preferable if you can get it through promotions from new credit card companies.
5. Make Drastic Cut Backs Depending on how much you can handle to Pay Back
If you are used to 3 cups of coffee a day from your favorite coffee shop, you may now need to brew your own coffee at home. If you pay gym fees every month, maybe you need to exercise at home and go jogging instead.
6. Seek Professional Help if you Need to – and you Most Likely Do
If everything about financial management and debt seems too overwhelming for you, get a credit counselor to help you through.
7. Negotiate New Terms
Once you know your discretionary debt, discretionary income and you have made adjustments to reduce spending, it is time to go and negotiate new terms with your creditors. If you need help to do so, then get the help.
If drowning in debt is not motivation enough for you to change your attitude towards money, then you need to find out for yourself what will motivate you to stick to your plan.