Let me start with some money management tips here first diving into some debt consolidation ideas … in a list form. I like lists because they are easier to read and therefore, hopefully, easier to remember the salient points, easier to digest the helpful hints. Here are 5 strategies that could very well help you save some moola. And in these times we all know how important this is! So pay attention my friends….
Personal Money Management and some steps …
It’s hard to start your journey into debt consolidation, but you need to start somewhere. I’m no finance professional, but I know how confusing it is to manage all the debt one has accumulated and left scattered all over your financial ‘map’. You don’t know what the interest rate is from one card to another. You probably don’t even know what your principle is! So, let’s start with these steps so you can better understand where to begin in your quest to debt consolidation.
One way to start debt consolidation is to first take out the expenses you DO NOT NEED or can live WITHOUT. Then take all your expenses and debt and be honest about how much you owe and how much you need to live on. Getting rid of the interest rates and penalty fees is a priority. If it’s not up there in your debt consolidation plan, it should be. Forget about ‘dealing with the penalties later’ mentality. If you are only paying the interest rate you are going deeper and deeper into debt and no one is going to care or let you know until you grown some courage and take a good honest look at what you are UNABLE to. Don’t let this incapacitate you. Make it work for you. Make it give you momentum. Let it light a fire under your arse. This is when you really, truly need to think about your options. This is when you consider the option of debt consolidation. And at this point, you need to do your research!!! Or else, what’s the point? You need to get a grip on your destiny. You really are the only one who can do it. Please take some time to take a serious look at your financial position and if you are ready to cut some of those luxuries and vices and bad habits and credit cards, you have taken the very first steps at debt consolidation.
Many people have constrained budgets. This means they have to exert double effort to satisfy all their basic needs and meet their obligations while still have enough left to gratify some of their pleasures or wants. Personal financial management is not an easy task, especially for those whose income is limited. Fortunately, there are some good ways to help those of you who want to reduce expenses and move towards to the stated goal of debt consolidation and, hopefully in the end, some financial freedom.
Debt Consolidation First Steps: Saving Money Starts at Home
You may want to start cutting down on your expenses at home. Save money by saving electricity. You should know by now that as you reduce your electric consumption, you also reduce your electric bills. Thus, it’s a good idea to start following a few electricity-saving tips. For instance, switch off appliances that you aren’t going to be using in the next say, 5 or 6 hours. Leaving your appliances on standby mode is not enough; you must completely turn them off, or unplug them when necessary. Reduce your water consumption as well.
Be Aware of Your Expenses
Step 2 toward getting to debt consolidation is: Keep track of all of your expenses! You should have an organized record of your expenditures so that it will be easier for you to determine whether you are still living within your personal budget. Take note of your bills — electric, water, telephone, and all the others. Be reminded of all the bills that you have already paid, and those which are left outstanding. Aside from your house bills, you should also keep track of you personal expenses. You should be able to balance your necessities and luxuries. You can’t ever go wrong with living just within your means.
Put Some Money Aside
Step 3 toward getting to debt consolidation is: You should always be able to put aside even a small portion of your income. Your change can be kept in a piggy bank, and as you fill it up little by little, you know that you will have some money in case you need some for emergency. Be practical. If you can refrain from using your credit cards, then do so. This will save you from paying accrued interests, and your money can still be used for the more important things.
Prepare for What is Ahead
Step 4 toward getting to debt consolidation is:Be ready for the future because it is as important as the present. Think of possible contingencies that may affect not only you but your family as well. Prepare for your future so that you will not start from scratch in case something unfortunate occurs. You may want to apply for insurance policies that will give you benefits. This may be a very good investment for your money.
Teach Your Children What You Know
Debt Consolidation 5: Lastly, your children should be as good in handling as expenses as you are. Teach them, as early as now, to appreciate the money that they now have. Let them feel how difficult it is to earn money. You may try a reward system, wherein you will only give them extra money if they have worked hard for it by doing their chores or by doing great in school, for instance. Once they realize how difficult it is get money, it is more likely that they will be penny-wise.
Some More Tips filed Under Debt Consolidation: 7 Ways to Achieve a Better, Debt-Free Lifestyle
According to statistics, the average American family shoulders approximately $9000 worth of unsecured debt. WOW! Perhaps this is because of man’s want and desire to live a life that is not within his means. Exceeding your credit limit in moderation is a usual thing; however, you should be sure that before its interest is compounded, you would have already paid your dues. You should be able to manage your finances well so as to avoid incurring greater obligation.
Pay Your Obligations at the earliest Possible Time
You should not wait for the due date to start paying your dues. You need to bear in mind that the longer it takes for you to pay your loan, the higher interest will then accrue. Imagine, the money that you are paying for the interest could have been allotted for other much important things. The Cambridge Consumer Credit Index believes that most Americans have credit card debts on which they pay more on the interest. Because of this, those who are not paying the full amount of unpaid balance are in fact just paying only the minimum. Sadly, among those who have outstanding balances, only a few are able to pay half of the balances.
How to Be Discharged from Indebtedness
Careful planning, control and restraint may help you get away from your debt-dilemma and steer you away from your goal of debt consolidation. Here are 7 things you can do to help you on your way to personal debt consolidation and onto to achieve a debt-free life:
1. Remember that your credit cards are supposed to be for emergency use! Upon acquiring a balance, be sure that you pay it within 30 to 90 days. This will prevent the interest from accruing badly, thus the increase of your debt isn’t going to be too much for you to handle. You don’t want to be paying off the same obligation for several years. If this happens, you may end up losing first the cause of your indebtedness even before losing the debt itself.
2. If you are already indebted, you might as well refrain from using your credit card to avoid acquiring more debt. You do not need so many credit cards because too many of these may just tempt you to use them more often than necessary. If you happen to be applying for the best credit card, go with the credit card company that is offering best terms.
3. Listen to advice coming from credit firms or organizations. Be knowledgeable of the different courses of action that you may file, such as consolidation of debts or repayment of the debt that has has the highest rate of interest prior to other debts.
4. Create your own plan that will help you take care of your obligations. Consider all factors such as your income and assets. From here, you should be able to balance your spending habits and debts with your income and assets.
5. Find ways to reduce your unnecessary expenses. Be practical and resourceful enough so that you can save more money on more useful things. You can find more important things to invest on other than those bad habits of yours.
6. Try to increase your income. Get involved in activities that can give you more profit. This will help you sustain a good flow of earnings.
7. Try your best to save something every month, regardless of how much it is.
Do I really need to consider debt consolidation?
Only if you are WAY over your head in debt and don’t know how much interest rate you pay per month per card, don’t even know if you are making a dent in your principle debt and you seem to be paying for years and years on a card where the amount never, ever seems to be any less from month to month? Do you know the answers to these questions? You should. You should know this before you even consult about debt consolidation.