Debt Free Solutions |
By Sybria White on August 23, 2010
.jpg.aspx) When it comes to taking action against accumulating debt, there are many options. Debt is something most of us will face. Whether it is student loan debt, car loan debt, home loan debt or credit card debt, there are steps you can take as a consumer to become as debt free as possible. These steps will be outlined in this article. There are two types of debt: secured and unsecured debt. Secured debt is debt that is secured or tied to something as collateral. By contrast, unsecured debt is not secured or tied to anything for collateral. As I have mentioned earlier, debt is almost inevitable, however unsecured debt can be more readily controlled versus secured debt. This article will focus on minimizing and eliminating unsecured debt.
Any path leading to a debt free future begins with a good budget. The budget is essential to debt freedom, because managing your expenses more effectively leads to less debt. To accomplish an effective budget, you must first list your income from all sources. Following this you should list your fixed and variable expenses. Fixed expenses are things like mortgage payments, or car payments. Fixed expenses, as the name implies, are expenses that do not change. Variables expenses, by contrast, do vary from month to month. Credit card bills, the cost of food and entertainment, may be expenses that fall under this category. The goal for your budget is to have enough to cover the bare minimum. This includes expenses covering food, housing, health care, insurance and education.
In addition, to developing a budget, debt freedom can be accomplished by contacting your creditors. If you contact your creditor(s), and bring to their attention that you are having difficulty making payments, there is a possibility that they may work out a modified payment plan that will make your situation more manageable. This step will free up pressure off you budget and make it easier to make ends meet.
Other debt free strategies that you could turn to are credit counseling and debt management plans. There are several nonprofit companies that offer counseling and suggest debt management plans. If you have attempted the previously mentioned debt free strategies and were unsuccessful, credit counseling and debt management may be a great option. When using these methods just be aware for the legitimacy of the company. Make sure you do your research to find the right organization for you.
Source:
http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre19.shtm
Note: Many companies advertise a variety of debt free solutions but they normally push only one option that they profit from. Make sure that you choose a reputable provider that is giving you real options and helping you make an informed decision on how to proceed. |
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