Everyday we hear from people who are in debt beyond their ability to pay. A large part of this debt is created by unwise use of credit. It might be credit cards, it might be title loans, it might be short term loans from a credit lender. Regardless they suddenly realize their commitment to pay the debt exceeds their income.
That is a frightening time for most. Usually the house mortgage is on the cusp at this point and they face potential foreclosure. Money they need to provide for their family is taken up to absorb the money required for their credit card payments.
Normal choices are to not pay some debts to make sure they can take care of their family. This choice is common sense but is a bit misplaced. Any debt Reconstruction plan must start with the eliminate of any new debt. Borrowing money to pay off current debts is at best a wash if that money pays off a non reoccurring balance. To use it to pay off monthly payments on a debt is a self fulfilling hole. It does not work.
We will cover an approach to help curb this spiral of increasing cost and debt which is multiple layered.
Step One is to stop increasing the debt in any fashion.
Step Two is to find the most likely debt to pay (usually the lowest balance debt), one that can be paid off with current resources.
Step Three is to make only minimum payments on any other outstanding debt with laser focus on eliminating the selected debt.
This is the start, we will expand the solution in later post.
Remember a No Debt Zone is here!
Thursday, July 2, 2009
It's a No Debt Zone - # 2
It would be wonderful if someone would just give you a bucket of money to pay off all your debts. That would be great but also not probable. Though we hear of lottery winners we know that for us that isn't going to happen.
So as we look at the stack of bills, then the smaller balance in our banking account we know this is a losing battle. What is going out the door is so much larger than what is coming in the door the imbalance is starting to be frightening.
Maybe you think about this mound of debt while trying to go to sleep at night wondering what to do. Maybe you don't think about it and maybe you don't care right now but it is likely you will care later at which time it might be a very difficult situation.
The best time to correct a problem, fix a concern is before it becomes critical, hot about ready to explode. The reason is simple, fixing it first lets you take the lead, direct the approach. If you wait until the process is driven by pressure of debt collectors, rejections for loan applications it is going to be a much harder to correct.
Let's take a step at a time. The very first step is to lay out on a spreadsheet or paper pad the total debts owed. The amount total, the monthly payments, the balance and length of loan. The categorize them into types of debt such as home, utilities, credit cards, car and others. Add all the columns together to find out how deep is the hole.
Do not forget when doing this you have other living expenses that must be placed in this process, food, insurance are simple examples that probably will not be included in the first list.
Once done you have to find a plan. A choice of when, what, how comes next. A series of test to consider shortly.
Remember a No Debt Zone is here!
So as we look at the stack of bills, then the smaller balance in our banking account we know this is a losing battle. What is going out the door is so much larger than what is coming in the door the imbalance is starting to be frightening.
Maybe you think about this mound of debt while trying to go to sleep at night wondering what to do. Maybe you don't think about it and maybe you don't care right now but it is likely you will care later at which time it might be a very difficult situation.
The best time to correct a problem, fix a concern is before it becomes critical, hot about ready to explode. The reason is simple, fixing it first lets you take the lead, direct the approach. If you wait until the process is driven by pressure of debt collectors, rejections for loan applications it is going to be a much harder to correct.
Let's take a step at a time. The very first step is to lay out on a spreadsheet or paper pad the total debts owed. The amount total, the monthly payments, the balance and length of loan. The categorize them into types of debt such as home, utilities, credit cards, car and others. Add all the columns together to find out how deep is the hole.
Do not forget when doing this you have other living expenses that must be placed in this process, food, insurance are simple examples that probably will not be included in the first list.
Once done you have to find a plan. A choice of when, what, how comes next. A series of test to consider shortly.
Remember a No Debt Zone is here!
Wednesday, July 1, 2009
A No Debt Zone #3 - Making Money Online
Extra income is wonderful when it boost our spending power. With this influx of cash we think our wealth position will improve. It might, it might not. The basis of this variable is debt. Have you stabilized your debt before increasing income? If not you will find the new income provides only a short term relief to your status.
Stabilizing debt is the first step. Debt cannot be allowed to grow. Once that goal is done it is time to make money to improve your life financially.
One approach people pursue is using the Internet to make money. They hear from friends, they read online and see in advertisements the vast, quick way to make money is through the Internet. Ads are to attract, to create an interest not to educate.
To obtain a solid overview of what is required to pursue making money on take a few minutes to visit with David at 4-Day Money Making Blueprint!
This 25 video educational, training program is a complete introduction, how to do and implement an online money making effort. The first step in developing a plan for success is learning what is involved and how do you do the steps. These videos will help you in all those goals.
When you couple control of debt with additional income it allows for financial stability first followed by financial growth. Give it a try and let me know the results.
Remember a No Debt Zone is Here!
Stabilizing debt is the first step. Debt cannot be allowed to grow. Once that goal is done it is time to make money to improve your life financially.
One approach people pursue is using the Internet to make money. They hear from friends, they read online and see in advertisements the vast, quick way to make money is through the Internet. Ads are to attract, to create an interest not to educate.
To obtain a solid overview of what is required to pursue making money on take a few minutes to visit with David at 4-Day Money Making Blueprint!
This 25 video educational, training program is a complete introduction, how to do and implement an online money making effort. The first step in developing a plan for success is learning what is involved and how do you do the steps. These videos will help you in all those goals.
When you couple control of debt with additional income it allows for financial stability first followed by financial growth. Give it a try and let me know the results.
Remember a No Debt Zone is Here!
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