Debt Management

Organize Your Finance

You need to know how much money is coming and going out, and most importantly where it's going. This is a task all too many people avoid while in debt, but avoiding your budget won't make it any better if you're not making ends meet every month, and that's one of the reasons people get in debt in the first place.

• Are there non-essentials you can eliminate?
• Are you spending more money than you should be on something in particular?
• Are you habitual shopper to burst pressure or depression?

Consolidate High Interest Loans

Any loan payments are comprised of two parts, the principal on the debt itself, and the interest you pay on the loan. If you're making monthly payments instead of paying the balance in full, you're inevitably paying interest. If you're making minimum payments on high-interest loan(s), you're usually paying mostly interest.

Avoid Taking On New Credit

Once your debts have been cleaned up, keep it that way! With a better credit record and your debts handled. If you don't need credit, don't take it.

Clean up any inaccuracies in your credit report

Sometimes after cleaning up your debts there may still be inaccuracies on your credit report, which will continue to effect your credit unless resolved. You have a right to see your credit report, and can easily clear up any mistakes once identified.

Learn To Save Up A Little

When you're in debt it can be hard to save money, but try to tuck away a little each paycheck if possible. A little money saved help you avoid taking on high-interest loans or using credit cards when funds are tight.

Put a little something extra in your pocket by refinancing your loan

By refinancing loan now, you can almost immediately generate some extra spending money. Many consumers know it's possible to save money by refinancing their home loan, but most don't realize that they can also save by refinancing their car loan.

Stop paying private mortgage insurance (PMI) and save money

Many homeowners who pay PMI assume that the home equity they're gaining from today's rapidly appreciating home values will lead to PMI automatically being dropped as a requirement by their lender. The reality is that PMI is based on the value of the home at the time the mortgage was funded; therefore, PMI won't go away automatically unless the borrower attains 20 percent of the equity in their home based on the original property value. In other words, if a consumer is stuck paying PMI, which isn't tax deductible, it makes sense for them to see if they can eliminate it by refinancing their mortgage.

Make an extra mortgage payment and save money at tax time

You can save money at tax time by making an extra mortgage payment during the year. By making an extra mortgage payment by December 31, you get a greater mortgage interest deduction for this tax year. You'll also be one payment closer clear loan/debt.

Review your debt and identify ways to reduce costs

By making the time now to take an inventory of your current debt, you can significantly trim down your existing debt and save money throughout the year.

• collect information on each outstanding debt including its balance, regular payments, interest rate and credit line amount to better understand your situation.
• Prioritize high-interest loans so that you can pay them off first. Consider consolidation of your high-interest credit card debt into a lower rate home equity loan, which may be tax-advantaged.
• Update your debt inventory each month so you can eliminate surprises and maintain spending discipline.
• Identify three ways that you can cut costs each month. No matter how small, every little bit helps - and you'll likely be surprised this time next year when you see just how that tiny steps measured up to a huge lump sum of savings.

Some tips for what to do if you fall behind Debts

• Lots of people sink into a financial hole because they aren't paying attention. The first step is to figure what you make and what you spend, then look at ways to spend less.
• Stop using credit cards and start making more than the minimum monthly payment.
• If you can't, call or write to your creditors. Don't hide or hope they'll forget about you. Some will probably agree to take lower payments or reduce interest if you make the payments on time.
• Be wary of the idea that you can borrow your way out of debt. A home equity loan could lower your monthly payments, but if you fall behind, you could lose your house.

Ideas concerning both credit and credit cards that might help:

• Don't buy items to make yourself feel better. Go window shopping but don't carry a credit card or check when your depressed.
• Keep your charge receipt in one place. Verify that the charges are correct by matching your receipts to the credit card invoice. Too many reports are coming out that you do not verify your invoices and error or false charges are going undetected.
• Protect not only your cards (sign them immediately), but the number. Shred trash with the number. Insure sales people shred any manual carbons in front of you.
• Draw a line through any blank spaces above the total when you sign any credit slip.
• If you move, insure you notify credit card companies even if you have no balance. You might have your new card mailed to your old address. Notify credit card companies IMMEDIATELY of a lost or stolen card.
• Don't just trash unwanted credit approval applications. A thief can still get great information from it as well as activate it.
• Resolve an identity theft situation as soon as possible - especially because it can take up to six months to correct a mistake.
• If you have to shop with a credit card, use the one with the highest interest if it will be paid off immediately and the one with the lowest interest if you plan to carry a balance.