Debt Reduction Strategies

Debt Reduction Strategies

Many types of debt are a burden to Americans all over the nation. Debts such as credit card  debt, mortgages on homes or properties, student loans, hire purchase agreement, and maybe even taxes owed to the IRS. It is unfortunate to some to be experiencing insurmountable debt woes before life has even begun such as college students.

Living a debt free life may seem hopeless or one that is a far-away dream. How can one live a financially free life if he is burdened with overwhelming debt problems? Not to worry, debt can be overcome easier than some may think. Below are some simple yet very effective steps to take to cast off debt in the near future.

1. Get organized and make a complete list of all your debts.

It may not seem as an important step in eliminating debt, but once you have listed down the complete details of all your debt, it would be so much easier to track each of your balances the moment you start paying them off. This list should include the names of all your creditors, all your outstanding balancing, the interest rates, and the date of your payments.

2. Take advantage of a free debt reduction calculator online

Are you familiar with a debt reduction calculator? It is a web based smart tool that is used by professional debt management agencies to help consumers use the snowball approach to reduce their debt. You can easily download this from the web. Simply type “debt reduction calculator” in your search engine and you will get results of websites where you can download it from. Included in your download are 2 excel spreadsheets. The first sheet is where you will need to enter your payment schedule. Once the data is processed, it will automatically give you a summary of your results. The second sheet is meant to be printed for you to be able to keep track of your monthly payment and give you a general view of how the snowball effect is helping considerably in the reduction of your outstanding overall amount owed.

3. Instead of just paying monthly, consider Bi-weekly payments.

This is such a simple and light move of getting to pay an extra payment in a year. Let us do the math: there are 12 months in a year, so if you pay monthly, you pay 12 times. On the other hand, if you make payments every other week, you end up paying 26 times. In that case, you actually make 13 monthly payments. That would be an extra payment to a year. So instead of getting burdened with having to come up with a whole month of payment for the 13th month pay, you only pay a little extra in a month, which would not be heavy on the budget.

4. Round off your monthly installments to the nearest hundred.

Let’s say that your minimum required payment in a month is $815. Round this value up to the nearest hundred which would be $900. Surely, you would not even miss an extra 50-99 dollars but that extra amount would certainly get you out of debt faster than paying just the minimum each month. Besides, paying a little extra above your minimum is so much wiser than just spending it on other unnecessary purchases.

5. Avoid purchases that you can live without

In order to reduce debt, you would want to channel every extra dollar you have towards debt payment. This would mean that it is of utmost importance that you start living within your means. It is high time to consider eliminating expenditures that may be small but are eating up on your budget. Expenses such as eating out, going to coffee shops for breaks, shopping sprees on sale events, membership in the gym, club memberships are just a few items in the list of your budget that you may be able to do without for now.

Also, try to be thriftier with the necessary expenses. Next time you go shopping, purchase generic items – you will be surprised at how much extra you spend on brand names. Clipping coupons for groceries would be of help too.

6.  Look for ways to increase your monthly income

Sacrifice plays a very important role in debt reduction. Start looking for a second job or a sideline business. Whatever you make with this extra income should be geared towards paying off your debt. Your goal is to get out of debt in the soonest possible time. The only way to do that is to reduce your expenses, increase your income and whatever savings you get out of it should be used to pay your debt off.

7.  Stop borrowing

Even if you have increased your income and reduced your spending, getting more debt will not help in your quest of being debt free fast. It is not a wise move either to get more debt to pay off your existing debt. That will get you even deeper into debt problems. Now is the time to get rid of the buy-now-pay-later mentality. Cut up all your credit cards, or at least leave them at home. Try to discipline yourself in using cash for every purchase you make.

Remember that your goal is to get out of debt fast. It may not seem easy, but with determination, focus, passion, and commitment, being debt free would not be a distant dream at all. Without debt, life is just so much brighter.

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Monday, April 12th, 2010 Debt Reduction Strategies No Comments

Debt Reduction Strategies – An In-depth Analysis

Debt Reduction Strategies Part 1

There are different advices on how to sufficiently reduce debt. This article will go in depth on how to reduce and ultimately eliminate debt in 2 ways. The first is a method that is considered by most as extremely difficult and the second is quite unorthodox. Here is the first part of a series of 2 articles on debt reduction strategies.

Method 1 (the more difficult method)

1. Start saving now. You will need to get rid of expenses you can live without and spend only for necessities. Make an honest evaluation of necessities as opposed to luxuries and make an effort not to spend on anything in the luxury department.

2. Whatever you have saved from eliminating luxury expenditures should be channeled to paying off debt. It is time to seriously consider paying more than the minimum requirement each month. If you insist on paying only the minimum monthly, it would be close to impossible for you to get out of debt in the near future

3. If you are a homeowner, consider refinancing your home with a mortgage that has a lower rate that has relatively lower points. Better yet, if you are drowning in debt problems, sell you home and save the equity. In the meantime, try to consider renting a place that would cost half of your current mortgage. Whatever you save in rent as compared to your mortgage, channel every penny to reducing your debt, and gradually work your way to ultimately eliminating all your outstanding balances

4. Cut down on expenses inside and outside the home

- One example of reducing expenses inside the home is to conserve energy so you can get to save on utilities. Simply turning off lights when they are not needed can greatly impact your utility bills

- cutting down on expenses outside the home would mean avoiding eating out and take a meal from home instead, coordinating trips and vacations, cutting down on recreational expenses such as gym memberships, movies, and the likes.

5. If you are currently renting a space, look for a place that has lower rent. If that is not possible, consider looking for roommates to share the monthly rent expense. Again, whatever you save from this, gear it towards paying more to the balances you owe

6. Try to get more cash inflow in a month. This can mean that you have to look for a second job or find ways to come up with a home based business that could add to your monthly income. Whatever extra you make from this should not be spent for anything except for repayment of your debts.

7. It is high time to practice living only within your means. Sacrifices have to be done in order for you to realize your goal of being debt free in the earliest possible time. There are different ways to squeeze out some savings in your daily expenses: shop only for clothes that you really need and buy them only when they are on sale. Many shops offer as much 50% discount on clothing during clearance sales or seasonal sales – take full advantage of these offers at those times and remember to buy only what is truly necessary

8. Creating a menu for the week is not only helpful to those who are on a diet. This can also be helpful for people who need to save on food. Make a menu for the week and stick to it strictly. This would include purchasing only the fresh foods you need for the week and never more to reduce spoilage. You get to save more on energy too if you cook ahead of time, freeze whatever is left over for the next day, and remember never to buy more than what you will need for your weekly menu. Again, whatever you get to save from this method should be dedicated to paying off your debt. Every penny counts

The steps mentioned above may seem easier said than done, but in order to realize your goal of being debt free, there definitely are sacrifices to be made. With these steps, eliminating debt will no longer be a distant dream and you get to get back control of your finances sooner than you can imagine.

There actually is an easier way of eliminating debt and it is almost the exact opposite of what I have mentioned above. So, stay tuned for my next post.

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Monday, April 19th, 2010 Debt Reduction Strategies 1 Comment

Debt Reduction Strategies-An Easy and Unorthodox Method

Debt Reduction Strategies Part 2

There are two major ways to reduce and ultimately eliminate debt. The first method is significantly more difficult than the second is. I laid down the steps of the first method in my earlier post – Debt Reduction Strategies-An In-depth Analysis. This post will now go over a way to get out of debt easier and faster.

This method will require a competent bankruptcy attorney who will help you significantly in reducing debt and eventually get you out of debt all together.

Look for an expert debt attorney who has a reputable history and a great track record. Make an appointment with him (the first consultation is usually free) and bring a complete document of a list of all your outstanding debt balances, monthly expenditures, and fixed assets if any.

An expert debt attorney will be able to make a debt elimination plan that will allow you to retain your home by homesteading and lower your mortgage payments by having your creditors grant you a debt reduction or part elimination of your outstanding debts. Yes, this basically is the process of bankruptcy but you get to keep one or two credit cards that are excluded from the procedures as long as they have no current outstanding balances on them.

Know that bankruptcy is no longer considered to be shameful and a stigma of failure. With America facing an economic turmoil nowadays, bankruptcy is quite rampant. Many Americans have been forced to file for bankruptcy due to loss of jobs and many other unfortunate financial circumstances, which have led to a nation with seemingly insurmountable debt problems. Yes, bankruptcy has a very negative impact on one’s credit score, but with what is happening to our economy today and with so many people filing for bankruptcy, it is inevitable that all credit scores will soon be revised to make it easier for American citizens to be able to get credit again.

Look at it this way – even the big players in the market have declared bankruptcy practically overnight. Bankruptcy has turned out to be quite beneficial for them. It is a perfectly legal procedure. Many have been forced down this road. What many are not aware of is that even if you are not forced to file for one, it can certainly help you out eliminate debt in the earliest possible time.

With this method, you are given a new slate in life with the ability to keep your home, you get to keep some or most of your savings, your 401 K is protected from the procedure, you still have one or two credit cards to use in case of emergencies and on top of all that, your debt is considered paid in full.

If you do opt for this method to eliminate debt, please refer to my first post Debt Reduction Strategies-An In-depth Analysis to find out more ways on how to manage your finances and stay out of debt for good.

Different folks, different strokes – the choice is yours. Whatever you think is the best method to get out of debt and start living financially free – go for it. What is of utmost importance is to act on the problem and not wait for the problem to be so overwhelming that you practically cannot think straight anymore. Do what the big players in the market do – get all the information you need on how to solve your debt problems, lay out a realistic and doable plan that will get you out of debt and make you debt-free for life, and follow through with the plan.

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Monday, April 19th, 2010 Debt Reduction Strategies No Comments

Debt Settlement Debt Consolidation – Which is The Better Option in Reducing Debt?

Debt Settlement Debt Consolidation – both of these options are viable solutions to reduce and eventually eliminate debt. The difference lies on the time it will take you to get out of debt and the effects they have on your credit rating. So before even seeking for a debt settlement or consolidation program, it would be wise to get all information regarding each of their benefits and consequences.

Debt Settlement – advantages and disadvantages:

With a debt settlement program, as much as 50% of your debt will automatically be eliminated. In this scenario, you will be able to get instant relief in your monthly expenditures and your monthly debt payments will be considerably reduced. In addition to that, since your debt will be reduced to half of the amount, you would be able to be debt free so much sooner than paying the full amount of your original debt.

Also, with this kind of program, you can immediately start rebuilding your credit score. You may be able to manage your debt payments better since they are more affordable thus leaving you no excuse to default on the payments. Once you start making consistent payments to the loan that has been settled, it will definitely reflect in your credit score in the near future.

On the other hand, there are consequences you have to face in settling debt. The major downside is the adverse effect it will have on your credit score. It is inevitable that your credit score will plummet to a low 500 or even lower once your debts have been settled. However, it would still be possible to rebuild your credit within two years as long as you never default on any of your installments to the loan.

Another downside to a debt settlement is that the Internal Revenue Service considers a debt settlement as some sort of income or cash received. Therefore, you would have to deal with the tax implication of a write off. There are also some states where you are required to pay additional state taxes for a debt settlement.

Debt Consolidation – advantages and disadvantages:

Unlike a debt settlement program, your credit score will not in any way be harmed by a debt consolidation. Although there is no drastic reduction of your loan with this process, you may still manage to get a more affordable payment plan by acquiring lower interest rates with the consolidated loan. Usually, a debt consolidation is done through a professional consolidation company wherein they negotiate the terms of your debts with your present creditors. You then would have only one account to pay to your consolidation company and they in turn disperse the payments to all your other creditors.

The services of a debt consolidation company include completion of all the paperwork necessary, cancellation of fees, and closing your accounts with your previous lenders. These alone would in fact lessen the stress and hassles you will be encountering if you had to go to each of your creditors yourself.

So, with a debt consolidation program, you acquire more affordable debt payments and at the same time, your debt will be more manageable since you will only be dealing with one account with your consolidation company. No longer will you have to face the hassle and stress of each of your creditor’s collection phone calls or mails, which certainly have caused many sleepless nights.

With a debt consolidation program, you may be able to see yourself out of short-term debt in a span of five years, sometimes even less.

Debt consolidation does not have as much consequences as a debt settlement since it does not have any impact on your credit score. However, in the process, most major creditors might not be willing to grant you more credit until they are sure that you have been consistent in the payments of your consolidated loan.

Also, if you have employed the service of a debt consolidation company, you do need to regularly check if the payments you have coursed through them are indeed reaching the offices of your previous creditors.

So, what is the right option: Debt Settlement Debt Consolidation?

The answer is relative to your situation – with a debt settlement you may experience an instant relief to your budget and you might be able to get out of debt within 2 years. Be reminded though, that your credit rating will suffer quite a tremendous blow in the process. If you think you can live with bad credit for a couple of years or so (this would mean you might not be able apply for a significant loan amount in the near future), then a debt settlement would be right for you.

On the other hand, if you want to keep your credit rating intact, you might want to lean more on getting your debts consolidated. It may not reduce your debt as much as debt settlement, but a reduction in interest costs will definitely make payments easier than getting no deduction at all. Besides, with only a single account to deal with, debt will definitely be more manageable. You may not be able to pay off your debt in full as fast as a debt settlement program, but it will surely reduce debt and get you out of it sooner than paying off your debt as you usually do.

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Wednesday, May 12th, 2010 Debt Reduction Strategies No Comments

Credit Card Debt Reduction- Legally Eliminate 50% of What You Owe

Credit Card Debt Reduction – Credit cards have indeed proven to be of help especially during times of dire need like emergencies and time of crisis. However, we are now facing overwhelming debt problems due to undisciplined and careless use of the same.

It is undeniable that credit cards have been a major cause of financial troubles for many due to seemingly insurmountable accrued debt accompanied by high interest rates and service charges. To top it off, this problem has worsened after the economic crisis our nation has experienced lately. Because of this, thousands of Americans lost their jobs or experienced a decrease in income, which made it quite impossible to cope with their monthly debt payments, thus forcing them to default on their debts at one time or the other. Unfortunately, there are even a lot of consumers who had no choice but to file for bankruptcy, which will stay on their record for years to come.

If you find yourself deep in debt problems, be advised that bankruptcy should only be considered as your last resort. There are available alternatives for consumers to get out of credit card debt without having to suffer a big blow to your credit rating. And the best option yet, is a debt settlement program. This process can eliminate 50% or even more of your credit card debt leaving you with the possibility of being debt free in as early as 2 years.

Ideally, a borrower with over $10,000 or more in credit card debt should seek professional help from debt settlement companies. These companies are equipped with the know-how of debt negotiation and a complete understanding of the banking system. With all the previous clients and creditors they have dealt with, the negotiating process would definitely be handled more effectively in the least amount of time.

The process of debt settlement normally goes this way: the borrower who has an accrued credit card debt of $10,000 or more will be advised by the debt settlement company to default in their monthly payments. (For purposes of discussion, let’s say the borrower was you.) After a period of 90 to 120 days, your creditor will then sell off your debt to a collection agency for as low as 20% of your original debt. At that time, your debt settlement company will then offer your creditor to buy your debt for 40-50% of the original value. Of course, most creditors would agree to this deal since they will be getting 100% more than they would if they offered it to a collection agency.

So now, your debt will be owned by your debt settlement company at the amount they have acquired the debt from your creditor which is 50% less than what you have originally owed. You will be paying that debt off for a short period of time that you and your debt settlement company have agreed upon. Usually, around 2-5 years. They make a profit out of consumers with a service charge attached to the debt settlement program, which usually costs an average of $50 per month.

A debt settlement program is definitely a legal credit card debt reduction strategy. So if you are struggling with credit card debt that amounts to $10,000 dollars or more, consider a debt settlement to be a one of your most viable financial decision. A great amount of our nation’s population is suffering from overwhelming debt problems that the major creditors have no choice but to take advantage of the deals debt settlement companies offer. So act on it now, before the situation reverses and it would be too late.

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Wednesday, May 12th, 2010 Credit Card Debt Reduction No Comments

Safe Strategies for Financial Freedom | Achieve Financial Freedom




www.bestgoodinfo.com — Safe Strategies for Financial Freedom When growing your money, it may feel better to stick to tried-and-true techniques that will help your cash increase without much risk. The key to abundance for the risk averse is saving, followed by refusing to take on new debt or use credit. These methods don’t make a person wealthy right away, but they’ll work out in the long run. 1.Pay Yourself First – The safest way to start getting free of debt is to save. That means transferring a little bit of your pay into a savings account as soon as you get it– maybe even before. The easiest way to do this is to make the most of your job’s direct deposit program. 2.Resist the Lure of Credit – Credit card usage costs extra money in more ways than pesky interest charges. In fact, the cash spent on interest could be sitting in a CD earning a return, rather than lining the pockets of a bank. 3.Look Into Safe Investments – Even though the stock market may look tumultuous, investments are one of the basic methods of building financial wealth. The Motley Fool recommends two investments that cost little: the DRIP (Dividend Reinvestment Plan) or index fund. 4.Resist Lifestyle Inflation – Superfluous cash due to a bonus, gift or plain luck can seem fun, and may lead to a bad habit called “lifestyle inflation.” It’s a reflex to spend more on pleasure purchases during high financial periods in reaction to other months in which money was tight. Don’t do this. To learn more about …

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Friday, August 27th, 2010 Debt Reduction Strategies No Comments

Free debt elimination strategy 3 of 3




See how much you would save in interest using the Debt Eliminator system as shown with a debt reduction calculator

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Saturday, August 21st, 2010 Debt Reduction Strategies No Comments

Ellerfield Mortgage Reduction Strategy




Ellerfield can show you a better way to reduce your mortgage faster than ever before! And you dont even have to change banks! Contact us today for my information.

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Friday, August 20th, 2010 Debt Reduction Strategies No Comments

The Growing Tax Gap and Strategies for Reducing It




For more check out Citizens for Tax Justice at www.ctj.org Highlights of Robert S. McIntyre, Director of Citizens for Tax Justice, from the Senate Budget hearing “The Growing Tax Gap and Strategies for Reducing It” January 23, 2007

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Wednesday, August 18th, 2010 Debt Reduction Strategies No Comments

Financial Strategies | Debt Reduction, Consolidation, and O




www.DebtReductionConsolidationHelp.com. If You Are 10K Or More In Debt, Then You Can Learn A Proven System To Reclaim Your Financial Freedom! You Are Not Alone, Give Us A Call 1-877-253-8957

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Thursday, August 12th, 2010 Debt Reduction Strategies No Comments

Essential Wealth Building Strategies – Its a debt problem




Author Desi Doise discusses his new book “Essential Wealth Building Strategies” and the need for a reduction in debt and proper goal planning to be done to reach your future financial target

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Wednesday, August 11th, 2010 Debt Reduction Strategies No Comments

Debt Consolidation – An Alternative To Bankruptcy




www.DebtReductioncConsolidationHelp.com. If You Are 10K Or More In Debt, Then You Can Learn A Proven System To Drastically Reduce That Debt And Reclaim Your Financial Freedom! You Are Not Alone, Give Us A Call 1-877-253-8957 to Schedule An Appointment Today. Even if you’re more than 10K in debt, you can not only reduce your debt, but you can eliminate it entirely, and you can retire in wealth and security.

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Tuesday, August 10th, 2010 Debt Reduction Strategies No Comments

Debt Consolidation, 3 Steps To Financial Freedom




www.DebtReductioncConsolidationHelp.com. If You Are 10K Or More In Debt, Then You Can Learn A Proven System To Drastically Reduce That Debt And Reclaim Your Financial Freedom! You Are Not Alone, Give Us A Call 1-877-253-8957 to Schedule An Appointment Today. Even if you’re more than 10K in debt, you can not only reduce your debt, but you can eliminate it entirely, and you can retire in wealth and security.

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Monday, August 9th, 2010 Debt Reduction Strategies No Comments

Begin To Reduce And Consolidate Debt Today!




www.DebtReductioncConsolidationHelp.com. If You Are 10K Or More In Debt, Then You Can Learn A Proven System To Drastically Reduce That Debt And Reclaim Your Financial Freedom! You Are Not Alone, Give Us A Call 1-877-253-8957 to Schedule An Appointment Today. Even if you’re more than 10K in debt, you can not only reduce your debt, but you can eliminate it entirely, and you can retire in wealth and security.

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Sunday, August 8th, 2010 Debt Reduction Strategies No Comments

Living Debt Free




www.tradebit.com – Living Debt Free – You’ve been lied to by the debt consolidation and debt reduction ads on television. They make it sound so darn easy…Just call the number on the screen and your debts will miraculously be reduced by 40 to 50 percent or more. What complete and utter baloney! Or even worse, many of them are scams! The fact is, you could very well end up in a financial disaster after using one of these debt relief companies that promise you an easy way out of debt. Instead of getting out of debt, you may find yourself even deeper in debt or behind on your payments! Look, if you’re struggling financially, wouldn’t you prefer to regain control over your own situation rather than turn your financial destiny over to complete strangers? Of course you would! The first step to regain control of your debt and begin your journey to living debt free is asking the question “HOW DID THIS HAPPEN?” Believe it or not, debt, like weight gain, often sneaks up on us. The truth is, debt happens one purchase at a time; one decision at a time. It’s hard to take the necessary steps to make a change when you don’t even realize you need to. Recognizing you need to get out of debt and accepting that you need to make changes to accomplish this goal is the first vital step… And, denial is your biggest enemy! Don’t wait for debt collectors to start ringing your phone off the hook! If you’ve lost control over your finances, you CAN get it back. To discover a wealth of specific …

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Saturday, August 7th, 2010 Debt Reduction Strategies 25 Comments
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