Credit Card debts are so very easy to accumulate, yet can seem impossible to get rid of. The first step towards dealing with this situation is to acknowledge it and face up to the fact that your debt problem will only get worse unless you tackle it. The best way to put credit card debt behind you is to reach a settlement agreement with the card company yourself. You certainly should not consider taking out loans, or bankruptcy or anything else until you have tried to negotiate a settlement.
You do not need to use a company to do this for you. If you do, you will be paying them generously for their trouble, whether they make this clear to you or not. You could generally expect a settlement company to take about 15% of what you owe as their fee. When you already owe more money than you have got, that is potentially a lot of money to spend on something you could do for yourself at no cost.
With a little advice, you can approach your creditors yourself and negotiate a settlement that will allow you to pay back a reduced amount in settlement of the full debt. The credit card company naturally want their money back, but if they know you are not able to pay it all, they will settle for the most they can get. They will not agree to being ripped off, so you will need to prove to them exactly how much money you have and what you are in a position to pay.
To do this you need to prepare a personal financial statement, which will show clearly, your income, expenditure and what you have available each month. Your offer to them must be based on a fair proportion of your disposable income, considering any other debts and commitments you have. If you can prove that what you are offering is reasonable, you are in a much stronger position.
The process of negotiating with creditors is a well tested method and it does work if you follow it. Free guidance is available online for how to write letters, what you should say, etc. The process includes an initial letter to the credit card company to explain your position and that you wish to make arrangements to settle the debt. Once you have all the information you need and have prepared your financial statement, you can work out a fair offer and write to them again with this. It is important in any settlement process to put everything in writing and keep copies of all letters you send and receive.
You should start by asking them to waive any penalty charges, late payment fees and extra interest charges. For an overdue debt this alone can amount to about 30-40% of the debt. If you are in a position to offer a lump sum payment you may be able to agree a better deal than if you need to pay it off over a period of time.
If your credit card debt is fairly modest and you are not yet falling behind with payments, you may wish to consider just using balance transfers to improve your situation. By transferring to a new card with a special 0% offer on balance transfers, you can immediately save on interest charges and buy yourself time in which to pay off as much of the debt as you can. One of the key things with credit card debt is never to settle for just the minimum payment amount, or your debt will just mount up and up. Aim to pay the most you possibly can each month. The best way to do this is to set up a direct debt for the most you can afford, which will help ensure you do not miss any payments.
Read a detailed guide to negotiating debt settlement.
Friday, 9 October 2009
Wednesday, 7 October 2009
Sample Household Budget Forms - How A Home Budgeting Form Can Help Your Finances
People experiencing problems with personal debt are not the only ones who could benefit from proper budgeting when it comes to household finances. Finding a long term solution to debt does involve learning to control spending, but budgeting is a process from which anyone can get real benefits. Budgeting is not so much about scrimping and saving and saying no to everything, as about a comprehensive reorganisation of your finances. Done properly, budgeting will help you actually do more with the money you have.
The easiest way to begin budgeting is to use a household budget form. This will allow you to find out exactly where all your money goes, and then use that information to plan how much you really want to spend on everything. It is a two stage process – finding out where you are now, and working out where you are going to go from here.
A good household budget form will list out all your possible sources of income and expenditure, to help ensure that you do not forget about anything or miscalculate. If you use one that automatically calculates totals for you, this will reduce the likelihood of errors. It is very important to complete household budget forms carefully, as a very small slip on a number can have a significant impact on your totals. Imagine the difference an extra 0 would make to your salary figure!
Once you have completed all your income and expenditure, the totals should show you clearly your ‘bottom line’. You will see instantly whether you are spending more than you earn or not. If your spending is within your income, then you have no big problem, but you could still use budgeting to re-balance your spending to where you want it to go. If you spend more than you earn, however, then you need to take action and a budget can help you.
Your next step has to be to start from your actual figures for monthly spending, and put new budget figures in for what you can afford to spend on each of these areas in future. Clearly some areas you will have no choice about, such as mortgages, etc, but others you will have a lot more leeway. You need to work out your new budget so that your total expenditure is less than your income.
The next, and possibly most difficult part, is sticking to the new budget that you have worked out from your household budget form. This involves careful monitoring of everything you spend, and being able to keep track of your spending in each of the different areas. It also involves the same thing for anyone else in your household who will be involved in the process with you. This is where you may find it useful to look at home budgeting software to help make this more manageable.
Whether you use a household budget form or a budgeting software package is of less importance than that you manage to stick to your budget. Use whatever system works best for you.
Read recommendations on home budgeting software now.
The easiest way to begin budgeting is to use a household budget form. This will allow you to find out exactly where all your money goes, and then use that information to plan how much you really want to spend on everything. It is a two stage process – finding out where you are now, and working out where you are going to go from here.
A good household budget form will list out all your possible sources of income and expenditure, to help ensure that you do not forget about anything or miscalculate. If you use one that automatically calculates totals for you, this will reduce the likelihood of errors. It is very important to complete household budget forms carefully, as a very small slip on a number can have a significant impact on your totals. Imagine the difference an extra 0 would make to your salary figure!
Once you have completed all your income and expenditure, the totals should show you clearly your ‘bottom line’. You will see instantly whether you are spending more than you earn or not. If your spending is within your income, then you have no big problem, but you could still use budgeting to re-balance your spending to where you want it to go. If you spend more than you earn, however, then you need to take action and a budget can help you.
Your next step has to be to start from your actual figures for monthly spending, and put new budget figures in for what you can afford to spend on each of these areas in future. Clearly some areas you will have no choice about, such as mortgages, etc, but others you will have a lot more leeway. You need to work out your new budget so that your total expenditure is less than your income.
The next, and possibly most difficult part, is sticking to the new budget that you have worked out from your household budget form. This involves careful monitoring of everything you spend, and being able to keep track of your spending in each of the different areas. It also involves the same thing for anyone else in your household who will be involved in the process with you. This is where you may find it useful to look at home budgeting software to help make this more manageable.
Whether you use a household budget form or a budgeting software package is of less importance than that you manage to stick to your budget. Use whatever system works best for you.
Read recommendations on home budgeting software now.
Tuesday, 6 October 2009
How Do I Consolidate My Debts - Advice and Information About Debt Consolidation
In many ways a better question might be 'should I consolidate my debts', rather than 'how do I consolidate by debts'. Debt consolidation is a relatively straightforward process in itself, made as simple as possible by the loan companies who are eager to offer you a loan. However, before you concern yourself with the process you may wish to take a moment to make sure that debt consolidation is actually the best solution to your problem.
Debt consolidation is about taking out one big loan to pay off all your existing debts, leaving you with one single, easy to manage monthly payment to worry about. The clear advantages are the practical one of making life easier (you no longer have to keep track of all your different debts and creditors) and the apparent saving on monthly payment which are probably lower than your old combined debts.
You just need to look a little deeper though, to be sure you really are going to be better off. There is no arguing about the simplicity offered by consolidation and that this is definitely a benefit in terms of time and effort. But that relatively modest benefit is only worth it if you are also improving your overall financial situation. The thing to look out for is how much you will be paying back in total through your new loan, compared to how much you would have paid back in total through your old debts.
The reason I say ‘in total’ is because your debt consolidation loan is likely to be spread over a much longer period than most of your old debts were. Despite paying slightly less each month under the loan, the fact that you are still going to be making those payments well past the time when your old debts would have been settled means that by the end of the loan you may have actually paid far more than you would have if you hadn’t consolidated your debts.
So the question of how do I consolidate my debts has a pretty straightforward answer - you work out the total of all the debts you want to pay off, and you apply to one of the thousands of lenders who offer consolidation loans. Actually you should get quotes from several, as interest rates will vary a lot. When you know what interest rate lenders are going to charge you for a consolidation loan, you should then look again at your debts and select only those for which you are paying a higher rate of interest than the loan company is offering.
Better than that, though, is to give serious consideration to an alternative way of getting rid of your debt, which does not involve borrowing more money or paying anyone else for their help. The most effective long term solution to debt problems is to re-negotiate repayment terms with your creditors yourself. That may sound easier said than done, but it is a tried and tested solution and you can find free detailed guidance online.
Be careful not to jump straight into debt consolidation just because it is convenient. Work out whether you will actually be any better off in the long run, and don’t be tempted to automatically consolidate all your debts. Check the interest rates on your existing debts and choose carefully which debts you include, and always shop around.
Read reviews and recommendations for reputable debt management companies in the US and UK.
Debt consolidation is about taking out one big loan to pay off all your existing debts, leaving you with one single, easy to manage monthly payment to worry about. The clear advantages are the practical one of making life easier (you no longer have to keep track of all your different debts and creditors) and the apparent saving on monthly payment which are probably lower than your old combined debts.
You just need to look a little deeper though, to be sure you really are going to be better off. There is no arguing about the simplicity offered by consolidation and that this is definitely a benefit in terms of time and effort. But that relatively modest benefit is only worth it if you are also improving your overall financial situation. The thing to look out for is how much you will be paying back in total through your new loan, compared to how much you would have paid back in total through your old debts.
The reason I say ‘in total’ is because your debt consolidation loan is likely to be spread over a much longer period than most of your old debts were. Despite paying slightly less each month under the loan, the fact that you are still going to be making those payments well past the time when your old debts would have been settled means that by the end of the loan you may have actually paid far more than you would have if you hadn’t consolidated your debts.
So the question of how do I consolidate my debts has a pretty straightforward answer - you work out the total of all the debts you want to pay off, and you apply to one of the thousands of lenders who offer consolidation loans. Actually you should get quotes from several, as interest rates will vary a lot. When you know what interest rate lenders are going to charge you for a consolidation loan, you should then look again at your debts and select only those for which you are paying a higher rate of interest than the loan company is offering.
Better than that, though, is to give serious consideration to an alternative way of getting rid of your debt, which does not involve borrowing more money or paying anyone else for their help. The most effective long term solution to debt problems is to re-negotiate repayment terms with your creditors yourself. That may sound easier said than done, but it is a tried and tested solution and you can find free detailed guidance online.
Be careful not to jump straight into debt consolidation just because it is convenient. Work out whether you will actually be any better off in the long run, and don’t be tempted to automatically consolidate all your debts. Check the interest rates on your existing debts and choose carefully which debts you include, and always shop around.
Read reviews and recommendations for reputable debt management companies in the US and UK.
Monday, 5 October 2009
Home Budgeting Software - Advice On Tools To Help with Personal Budgeting Strategies
There can be little doubt that budgeting is a really useful way to plan and control your expenditure, but the reality of actually putting it into practice is often so daunting that we just never even start. There is a tendency to think of budgeting as a painful kind of rationing, making yourself go short of things you want and not being able to spend any money. In fact this is not the case at all. Good budgeting is just a way of reorganising your finances, so that you can get the most out of the income you do have. If you get it right, proper budgeting means you can actually identify where you are spending money that you don't really want to, and you can then save money and divert it to the things you thought you couldn’t afford.
In the absence of some guidelines on how to prepare a budget, not being quite sure where to start can be enough to prevent people from getting to grips with household budgeting. There are two distinct elements to budgeting. The first is the preparation of an initial financial statement detailing all your income and expenditure, which will give you a clear picture of your current situation. You then use this to identify the areas where your spending is not how you want it to be, and set a budget for your future spending. That can sound bad enough to many people, but the tricky part is then actually sticking to that budget by monitoring what you spend every day.
How to prepare a budget
If you want to prepare a personal budget manually, there are household budget forms online that you can download free of charge. These will help to guide you through the process and ensure that you do not miss out any areas of income or expenditure. While you can then use such forms to set a monthly budget for yourself, it is up to you to work out how you monitor and record your daily spending and measure it against your budget.
How Home Budgeting Software Can Help
The reason home budgeting software tools are so popular is that they make the difficult job of budgeting so much easier. The basic principles are exactly the same as for a manual budget, but a good budgeting tool will guide you through the process of entering your initial information, then make it very easy to identify the areas where savings can be made and where you need to change your spending pattern. The big advantage, though, is in the ongoing monitoring and measuring of your spending, which can be a real challenge to do properly without a budgeting software tool.
When selecting home budgeting software, it is a good idea to go for something that has either a free trial period or a policy where you can get your money back if you don’t like it. That way you have no risk and can make sure it really is the best option for your circumstances. There are lots of home budgeting software packages out there, but you may find that some of them are actually more sophisticated (and expensive) than you require. Some have the facility to deal with lots of different accounts, stocks and shares and all sorts of things, which for many of us are not really what we need the tool for. You don’t want to pay for lots of functions that you are never going to use, so go for a modestly priced, straightforward product. You also want a home budgeting tool that you will be happy to use regularly, so make sure you find one that is user friendly and not over-complicated.
Read recommendations on home budgeting software now.
In the absence of some guidelines on how to prepare a budget, not being quite sure where to start can be enough to prevent people from getting to grips with household budgeting. There are two distinct elements to budgeting. The first is the preparation of an initial financial statement detailing all your income and expenditure, which will give you a clear picture of your current situation. You then use this to identify the areas where your spending is not how you want it to be, and set a budget for your future spending. That can sound bad enough to many people, but the tricky part is then actually sticking to that budget by monitoring what you spend every day.
How to prepare a budget
If you want to prepare a personal budget manually, there are household budget forms online that you can download free of charge. These will help to guide you through the process and ensure that you do not miss out any areas of income or expenditure. While you can then use such forms to set a monthly budget for yourself, it is up to you to work out how you monitor and record your daily spending and measure it against your budget.
How Home Budgeting Software Can Help
The reason home budgeting software tools are so popular is that they make the difficult job of budgeting so much easier. The basic principles are exactly the same as for a manual budget, but a good budgeting tool will guide you through the process of entering your initial information, then make it very easy to identify the areas where savings can be made and where you need to change your spending pattern. The big advantage, though, is in the ongoing monitoring and measuring of your spending, which can be a real challenge to do properly without a budgeting software tool.
When selecting home budgeting software, it is a good idea to go for something that has either a free trial period or a policy where you can get your money back if you don’t like it. That way you have no risk and can make sure it really is the best option for your circumstances. There are lots of home budgeting software packages out there, but you may find that some of them are actually more sophisticated (and expensive) than you require. Some have the facility to deal with lots of different accounts, stocks and shares and all sorts of things, which for many of us are not really what we need the tool for. You don’t want to pay for lots of functions that you are never going to use, so go for a modestly priced, straightforward product. You also want a home budgeting tool that you will be happy to use regularly, so make sure you find one that is user friendly and not over-complicated.
Read recommendations on home budgeting software now.
Subscribe to:
Posts (Atom)