Sure Fire Ways      To     Debt Management  Do’s and Don’ts   Sure Fire Ways to Debt Management – Do’s and Don’ts - Page 1
INTRODUCTIONReducing your debt is something that can change your life. Today, people areracked with debt and as a result i...
TRACKING YOUR SPENDINGThe first step in debt reduction is knowing where your money is going. Bytracking your spending, you...
Don’t forget to set aside savings in your budget. Even if you cannot save alot right now, start with something. Once you’v...
Their debt ratio often stays the same, which is unfortunately, probably notmuch more than two paydays away from financial ...
A lower interest rate allows more of your payment to go towards the debtitself.Beware of the consolidation trap!The consol...
Another bad debt to avoid is a deal that offers you deferred payments for along period of time. Most often, these deals ar...
•   Talk to your creditors       Negotiate a lower interest rate if possible. If you ask for a lower       interest rate a...
CUTTING CORNERS WITH         EVERYDAY EXPENSESIf you try, you can probably cut corners on every day expenses. It canbecome...
warehouse outlet sales. This way you can get brand names at bargain      prices.For every bit you save, make a list and ch...
MAKING SACRIFICESA lot of these tips sound really good but you need self-discipline to getstarted. Making sacrifices can b...
that can help you make sense of really messy finances, you can seek creditcounselling from a non-profit agency who will he...
RESOURCE SITES:Bad Debt     Credit          Credit Card Debt   Credit            Debt                                     ...
cause or create financial gain or financial loss. The information contained inthis book may or may not help you in your ow...
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Debt Management Plan-Proven Simple Plan You Must Follow

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Debt Management Plan-Your Proven Step-By-Step Guide to Getting Out of Debt, Staying Out of Debt, and Living DEBT FREE!

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Debt Management Plan-Proven Simple Plan You Must Follow

  1. 1. Sure Fire Ways To Debt Management Do’s and Don’ts Sure Fire Ways to Debt Management – Do’s and Don’ts - Page 1
  2. 2. INTRODUCTIONReducing your debt is something that can change your life. Today, people areracked with debt and as a result it’s ruining families, creating stress, causinghealth problems and shattering dreams.There’s an epidemic with today’s debt ratio and more people than ever filebankruptcy and the rate of repeat bankruptcy filings clearly demonstratesthat people are falling into the same traps time and again. This free reportcan help you get started on your way to debt management so that youreduce your debt and can get your finances in order so that you control theminstead of the other way around.This report will tackle several areas of concern or advice: • Tracking Your Expenses and Spending • Organization • Setting a budget • Splitting your pay check • Consolidating bad debt • Debts To Avoid Like The Plague • Refinancing • Negotiating • Benefits of Buying With Cash • Paying Things Early • Cutting Corners With Everyday Expenses • Paying Yourself • Splitting your pay check • Making Sacrifices • Treating Yourself • Saving For A Rainy Day • Credit Counselling • When a loan is a good idea • Goal setting for Success • Avoiding Fees (late fees, bank fees) • Sell stuff Sure Fire Ways to Debt Management – Do’s and Don’ts - Page 2
  3. 3. TRACKING YOUR SPENDINGThe first step in debt reduction is knowing where your money is going. Bytracking your spending, you can figure out where money is going today andthat can help you figure out where things have gone wrong.Keep all your receipts and count up what you spend in a month. Then gothrough that list and figure out what was essential and what was not. Alsomake a list of bill payments you have not made. SETTING A BUDGETSetting a budget is essential in being able to reduce your debt. A budget notonly tells you where your money needs to go but if you refer to it continuallyyou’ll be sure that’s where it goes. A budget is necessary for financialmanagement and debt reduction and by organizing your finances, you will beable to not only live day to day but plan for long term and short termfinancial goals.How Do You Set a Budget?In order to create a budget you need to know what you owe and what yourgoals are. Set up a payment schedule for all your bills and know where themoney will come from. Many people organize their bills to be paid on theirpayday so that the money is removed from their account right away. Directpayment from your account through automatic withdrawal on your pay day isa great way to make loan, mortgage or rent and utility payments wheneverpossible.Along with knowing what you have to pay, you should also have a debtreduction and savings strategy in your budget. A good idea to do for debtreduction is to make a list of your payemtns. Many suggest paying off thehighest interest payment first and then paying the others. Beyond makingminimum payments, top up the payments so that you are paying down moreof the principal. Sure Fire Ways to Debt Management – Do’s and Don’ts - Page 3
  4. 4. Don’t forget to set aside savings in your budget. Even if you cannot save alot right now, start with something. Once you’ve paid down some of yourdebts you can allocate more to savings. ORGANIZATIONBeing organized will help you ensure that you can follow your budget. Toomany people don’t open their mail or simply stuff it into a box or folderwithout bothering to organize it. Through organizing your receipts and yourbills you can see your finances at a glance.Organizational StrategiesSet up a filing cabinet or accordion folder and have separate section for eachbill and receipt you have. As soon as bills come in, put them in a section of“to be paid”. After the bill is paid, file it in its section.Filing oldest bill to newest bill is simple and lets you see current bills at aglance. You can also set up a big 3-ring binder with pockets or dividers.Whatever system is easiest to follow is fine as long as you stay on top of it.Either address bills each day or do so at least once per week. The more oftenyou think about your finances, the better you’ll be at managing them.Consider allocating yourself a weekly budget for spending money andwithdrawing it from the bank. Using cash instead of credit or debit is themost effective debt reduction strategy because you are only paying for anitem once instead of multiple times over with interest rats and you can onlybuy it if you have the money to spend. The more organized you can be aboutyour money, the better your finances will begin to look. SPLITTING YOUR PAY CHECKWe become accustomed to living on a specific amount of money each weekor each payday, don’t we? That’s how overspending happens. If you talk to alot of people that are debt ridden, when they get a salary increase, theirlifestyle doesn’t necessarily change other than the fact that they spend more. Sure Fire Ways to Debt Management – Do’s and Don’ts - Page 4
  5. 5. Their debt ratio often stays the same, which is unfortunately, probably notmuch more than two paydays away from financial ruin.If you automatically allocate part of your pay to savings before you have achance to spend it, this is a great way to build a nest egg and rainy day fund.Many employers who offer direct deposit into your bank account will allowyou to take a percentage of your pay and allocate it to a separate bankaccount. It’s a good idea to do this because after a few paydays of receivingthe smaller amount, you will become more accustomed to your newpaycheck and not miss the amount.If you choose paydays to allocate extra money to your creditors, the sameeffect will result. Many successful people who worked hard to get out of debtworked a second job and then took the entire pay check and put it directlytowards their debt. If you need to open several bank accounts to create silosfor your money, that can be a great way to manage it so you cover debtreduction as well as investing and saving for the future as well as havingthings like vacation funds and funds for home improvements. How wonderfulwould it feel to go on holidays with a vacation fund and not come home to afear of opening your mailbox because you’re in serious panic about the stateof your upcoming credit card bills? CONSOLIDATING BAD DEBTConsolidation is a great way to reduce debt. It’s not as good as simply payingoff your debt but it can be good for several reasons. If you get a goodconsolidation loan, it’ll be for a lot less interest each month.Some people decide to consolidate or refinance debts to have lower monthlypayments. By doing this, you will relieve yourself of some stress and free upmore disposable income but you are just moving debts around instead ofremoving them.Instead of doing a debt consolidation for a lower monthly payment, why notdo it at the same amount of money you are paying today but with the benefitof: 1. A lower interest rate 2. One date to pay it each month instead of several with multiple bills. Sure Fire Ways to Debt Management – Do’s and Don’ts - Page 5
  6. 6. A lower interest rate allows more of your payment to go towards the debtitself.Beware of the consolidation trap!The consolidation trap happens to many good people who don’t take care andcaution with their finances. They consolidate all their credit cards and loanpayments into a single payment but instead of taking that opportunity to getahead of the game; they simply rack up more debt. They’re enamoured bythe sudden $0 balance on their credit card and instead of cutting up the cardor saving it for emergencies only, the begin the old cycle of spending moneythey don’t have. Now, they’ve got a big consolidation loan and more debt ontop of that.Use the consolidation or refinancing loan as a way to get ahead of the gameand pay off your debt instead of creating more debt. DEBTS TO AVOID LIKE THE PLAGUEWe know that there is more than one type of debt out there and you canclassify almost all debts into two categories, good debts and bad debts.There are some grey areas but most debts will either get you somethinggood or create more debt. A good debt would be a mortgage because youwill have something after the debt is paid and that something will likelyappreciate in value. A bad debt lets you buy now but pay later under theguise of convenience but with the startling reality that it will cost you more touse the credit than to pay with cash.Payday loans are the biggest offender in terms of bad debts. These types ofloans are short-term loans with big fat interest rates. They won’t do anythingto help your financial situation and you need to stop using these services.Many of them charge hundreds of per cent in interest and because thesecreditors offer a large portion of your paycheck to you in advance, it’s verydifficult to pay them back next payday without being tempted to simply carrythe loan on. The average payday loan place that offers you a $500 advancewill charge about $100 in interest. If you keep that loan going for exactly ayear, that initial $500 will cost you $2,900.00 to pay back. Pretty startlingnumbers…Avoid these debts. Sure Fire Ways to Debt Management – Do’s and Don’ts - Page 6
  7. 7. Another bad debt to avoid is a deal that offers you deferred payments for along period of time. Most often, these deals are offered by furniture orelectronics stores. They lure you into paying more than average retailpricing for a plan that defers the payment for a period of time. If you don’tpay the balance in full on the due date, you start paying heavy-duty interestcharges for that item that was already overpriced to begin with. If you can’tafford it today, save your money until you can.Don’t be tempted to borrow from Peter to pay Paul. If you’re using one creditcard to pay another or a credit card to pay a utility bill, you need toreorganize and re-budget so you can pay with cash and pay once instead ofover time with interest. REFINANCINGRefinancing can be done to help you stretch payments or get extra money inyour pocket which isn’t going to reduce your debt but if you refinance to geta better interest rate, that is a sure fire way to reduce your debt.If you have a high interest rate mortgage that’s at an adjustable rate and anew deal comes along that offers you reduced interest, go for it!Refinancing things for a lower rate and without penalties (or withoutpenalties that surpass the savings, at least) are a great way to reduce yourdebt and become debt free sooner while also saving you money now. Everylittle bit helps! NEGOTIATINGThe art of negotiating can do a lot for your finances. Here are some helpfultips for you: • Haggle When you want a big-ticket item, see if the sales clerk will drop the price. • Shop around Comparison-shopping for everything from big-ticket items to car loans, insurance policies, mortgages and credit cards will save you money and result in less consumer debt. Sure Fire Ways to Debt Management – Do’s and Don’ts - Page 7
  8. 8. • Talk to your creditors Negotiate a lower interest rate if possible. If you ask for a lower interest rate and they don’t bite, it might be prudent to allude to the fact that you’re considering refinancing elsewhere. It can’t hurt! BENEFITS OF CASHNot only is cash wise for spending your flexible expenses instead of buyingthings on credit but it gives you buying power. The next time you want tonegotiate on a price, you might find that having cash in hand is morepowerful that pulling out your old plastic friend.In terms of reducing your debt, using cash will help you see where you aregoing with your spending and it will ensure that you don’t pay for somethingrepeatedly through high interest rates. If you buy it with cash, it really isyours and no one can repossess it if times get lean and you won’t have toworry about paying for it in 24 small and manageable instalments. PAYING BILLS EARLYPay for things on time or early and get them out of the way. Paying early isgood for your credit rating as well as helping you avoid interest charges andlate fees in many cases.Many companies charge late fees and interest charges on things that arelate. This can apply to things like your utility bills and your credit card bills. Ifyou are regularly late, you could be wasting hundreds of dollars per year onlate fees. That money could instead go to pay down your debt. Keep acalendar with due dates and schedule payments to fall on payday wheneverpossible. Sure Fire Ways to Debt Management – Do’s and Don’ts - Page 8
  9. 9. CUTTING CORNERS WITH EVERYDAY EXPENSESIf you try, you can probably cut corners on every day expenses. It canbecome fun and challenging to do this. For every bit of money you save, putit into your debt reduction plan. This includes: • Making your home more energy efficient to save money on utilities. • Lowering your services on things like cable and Internet to lower levels. If you don’t want to cancel services, see about bundling services. Many companies offer bundled plans that save you a small fortune every year. • Talk to your bank to find out if you are using the best checking account and savings accounts possible. You could reduce your monthly charges and increase your interest earned. • Talk to the telephone company to find out if you’re using the best long distance plan for your usage levels. • Talk to your cell phone company for the same reason as above. • Clip coupons. Many families who regularly clip coupons can save $20 or more a week on groceries. That can translate to $100 a month off your debt, which equates to $1200.00 a year. • Bag your lunch instead of dining out. If you’re spending $5 a day on lunch at work, this can save an average of $25 a week or $100 a month. If you are married and your spouse also buys lunch, you could save $200 a month or $2,400.00 a year. • Get entertainment and holidays at off peak periods. For example, if you want to see a movie, either go to a matinee or discount day or rent it. If you want to travel, figure out when the low season is so you can save money. • Use loyalty programs. Loyalty programs can save you money and get you free stuff. That money saved can help you with your variable expenses. Many people cash in their points around 6-8 weeks before holidays so they can use those rewards to take the edge of Christmas spending. • Shop at the end of the season instead of the beginning to plan for next year and subscribe to newsletters for online sites that advertise Sure Fire Ways to Debt Management – Do’s and Don’ts - Page 9
  10. 10. warehouse outlet sales. This way you can get brand names at bargain prices.For every bit you save, make a list and challenge yourself to increase yoursavings amount next month. If you reach specific goals, make plans toreward yourself with a treat. PAYING YOURSELFIf you do all work and no play, you’ll be a pretty unfulfilled person. Debtreduction is important but don’t forget to have fun. As mentioned above,when you reach goals, reward yourself. It’s also important that you aresaving money for emergencies and for the future. Assign some of yourincome for your savings and specific funds. For example, if you want toreward yourself with a new electronic device, budget it in. It may take a fewmonths before the funds are available in your budget but you can do it if youset your mind to it and you’ll be proud of yourself for doing it with cash. GETTING MONEY FASTIf you want to get hold of money fast, here are some tips: 1. Sell stuff Have a yard sale or estate sale to raise funds. You can also dabble in online auctions. 2. Get a part time job If your income is not enough to help you bring in funds, get another job on a part-time or work at home basis. 3. Make some sacrifices You might need to give something up in order to free up some money. Sure Fire Ways to Debt Management – Do’s and Don’ts - Page 10
  11. 11. MAKING SACRIFICESA lot of these tips sound really good but you need self-discipline to getstarted. Making sacrifices can be difficult but when you do your budget andmake your debt reduction plans you might realize that there are sacrificesyou need to make such as moving to a cheaper home, selling an expensivecar or giving up shopping habits.Rest assured that these sacrifices will increase your quality of life in a veryshort time because you will be less stressed about money, your credit reportwill improve which will give you the ability to do more with your financialfuture and you’ll have money for the things you need and want. Thedifference is that when you find something you need or want, you’ll be ableto afford it and won’t have to feel buyer’s remorse when you’re still payingfor it in a year from now. SAVING FOR A RAINY DAYGrandma had the right idea when she put together her rainy day fund. Youneed to put money away for things like car repairs, home repairs, andmedical expenses and if you suddenly lose your income, you don’t want to bestruggling.In your budget, aim that as soon as you get debt free you put away enoughmoney for at least three months of expenses. This money can be in a highinterest bearing account so it gets working for you but make it accessibleunlike some locked in investments.Tip: Don’t make it accessible enough to become a temptation! Don’t put it inan account with a debit card, for instance. CREDIT COUNSELLINGIf you’re in over your head today and need help to get a handle on yourfinances and set a budget, ask for help. If you don’t have anyone in your life Sure Fire Ways to Debt Management – Do’s and Don’ts - Page 11
  12. 12. that can help you make sense of really messy finances, you can seek creditcounselling from a non-profit agency who will help you make a plan.Your employer might offer an EAP (Employee Assistance Program) to helpyou obtain these types of services free of charge.WHEN A LOAN IS A GOOD IDEAAll loans is bad debt, right? Wrong! As mentioned, when borrowing will resultin your getting more than you paid for, it can be a good investment. Forinstance, investing in a program that will yield you 10% profit in a year butonly cost you 4% in bank interest from a loan is a good idea.When looking at refinancing or consolidation, a loan with a lower interest rateis a good idea. CONCLUSION: GOAL SETTING FOR SUCCESSGoal setting is an important part of debt reduction. Not only should you makelong term goals but short term as well. Today your goal might be to get rid ofa loan or credit card. Tomorrow’s goal might be to save for a down paymenton your first home.Set financial goals for yourself and review your situation regularly to see ifyou are on track or need to tweak your goals or tweak your spending habits.It’s a great idea to write your goals down in a diary or calendar and checkregularly to see if your goals are met. For instance, savings goals, debtreduction goals and materialistic goals can all be tracked this way. It’s a goodreminder of what you want in life and can help you get back on track if youare veering off.Good luck with your debt reduction plan! Your life will be richer and happierwhen you are in control of your finances and your financial future. Sure Fire Ways to Debt Management – Do’s and Don’ts - Page 12
  13. 13. RESOURCE SITES:Bad Debt Credit Credit Card Debt Credit Debt CounselingDebt Debt Debt Consolidation Debt DebtCollection Consolidation Loan Management RecoveryDebt Home Loan Refinancing Mortgage RefinancingReduction Refinancing Refinancing DO YOU WANT TO BE DEBT FREE? READ THIS NOW! DISCLAIMERThis report contains subjective material provided for informational purposesand does not guarantee that advice or information described in this book will Sure Fire Ways to Debt Management – Do’s and Don’ts - Page 13
  14. 14. cause or create financial gain or financial loss. The information contained inthis book may or may not help you in your own finances.The publisher of this book will not be held responsible or liable for anyfinancial gain or loss resulting from information contained in this e-book.Always invest and borrow responsibly. Sure Fire Ways to Debt Management – Do’s and Don’ts - Page 14

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