Tips On How To Take Charge Of Your Debt
Many of my clients have many questions about getting out of debt. My collegues have encouraged me to write about getting out of debt.
It has been said “If you have debt, you can’t invest”, this is absolutely correct. We want to help you get out of debt so you can save honestly for your future.
During my career as a young advisor I incured alot of credit card debt. This debt put great stress on my family and my business.
Credit cards have a billion dollar business collecting monthly interest from the payments of their clients.
Credit card companies do not want you to get out from under your debt, which suffocates many families. Many divorces happen because of money problems. Debt destroys!
The Bible teaches “To owe no man nothing” (Romans 13:8). I realize many of you understand the pain of credit card debt.
Let’s start digging out. This is not a quick solution… Some of you have been in debt for years… Be patient… Be focused… Be consistent… Don’t get discouraged… Don’t cheat… Don’t argue.
You may say “I heard that”, “I’ve tried that” or “It doesn’t work!”
The problem is not with the method, the problem is you didn’t own it. You need to own it, make it your own.
It’s your plan, your debt, your credit. It’s now a war, it’s warfare, a battle… You against them. The fight for your money.
With all of this in mind let’s begin, don’t skip any of the steps.
5 Tips to Debt Elimination & Credit Restoration
•Negotiate rates and fees: I will “NEVER” pay an annual fee, this in not a gimme, the bank or credit card company is goint to charge you annually. Inform the bank or credit card company that you do not want to pay the annual fee, most of the time the creditors will waive it. Ask for a lower interest rate on your debt. If you can not make payments, ask for a plan.
•What about “Credit Repair?”: Credit repair companies can not remove your past information, they charge fees, send you reports and then disappear. You have rights to call the credit reporting services on your own.
b) Equifax.com – 866-349-5191
c) TransUnion.com – 877-322-8288
•What is your financial IQ?: Learn, learn, learn to build your financial IQ. You need to understand how money works. Learn about compounding (this is the strategy banks and credit card companies use against.) This point is the main reason this blog was written.
•Manage your budget: This the the one subject where clients chuckle. Clients say, “Ken, I don’t make enough to plan a budget.” This may be a surprise to you but once you do set a budget in place you will notice areas in your spending habits that are not controlled. These Habits are just that, a habit. This type of habitual spending has no accountability. Destroying these habits will free up money you didn’t know you had.
•This last step is probably the most difficult. Put a plan together, get organized, implement it. Arrange all of your credit cards, list them using these three headings: (here is an example)
AMOUNT INTEREST RATES PAYMENT
Car loan $11,250.00 8% $550.00/month
CHASE 3,590.00 15% 70.00/month
Sears 2,780.00 22% 35.00/month
Stud. loan 1,590.00 4% 50.00/month
In preparing this budget we recognized an addition $100.00 in our income.
We are going to take the lowest payment that has the highest rate of return.
The student loan has the lowest payment, but the Sears card has the highest interest rate, so we will implement our first attack toward Sears.
In our budget we will use the $100.00, unnoticed money combined with the $35.00, that is Sears minimum payment monthly until the debt to Sears is paid in full.
Our next battle will be against CHASE. We will use the total $135.00 we were using to pay off Sears and apply it to the CHASE payment of $70.00, making monthly payments to CHASE in the amount of $205.00, until that debt is paid in full. And so on…….
This simple strategy will save you thousands of dollars over the years.
“FREE BUDGET PLAN“
link >>>>>>>> Financial_Budget_Worksheet(1)