debt management

How to Make Your Financial Future Secure for Good

October 26, 2015 by arizona

Your current financial situation may feel secure, but you may have wondered about how to make your financial future good in the long term. The idea of investing your money or purchasing insurance can seem daunting, and fortunately, there are many other solutions for creating a secure, stable financial future that don’t necessarily involve large economic decisions.

[Read: 3 Solid Ways to Ensure Your Financial Security]

If you’re motivated and ready to make your financial future good — actually, great — in the long-term, here are several steps you can take to ensure a stable and secure financial future.

Envision Your Future

A simple method to make your financial future good in the long term, envisioning your future helps you to create a concrete economic plan. If you know what your ideal retirement looks like, or whether you want an early retirement, you can save according to these outlines. Knowing what you want and when you want it guides you in your savings. Once you figure out how much you need to save to reach that goal, you’ll inevitably realize how often you’ll need to save. With habitual, frugal saving, you can easily reach your goal in the designated time, and ultimately prepare yourself for a financially secure future.

Decrease the Ratio of Expenses to Income

If you’re spending more than you’re making, or just breaking even, you’re not adequately saving for the future. Capping your spending at a certain point each month can drastically change the balance of your savings account. Taking into consideration your monthly income, bills, and other necessary expenses, you can then find a number you’re comfortable with spending every month. This may require a few daily or monthly sacrifices, but it’s all in the name of trying to make your financial future good from retirement and beyond. If you’re still stuck on how to adequately decrease your spending, there are plenty of how-to guides that explain how to decrease your expenses without compromising your lifestyle in a dramatic way.

Create a System of Saving, Automatically

You may be having difficulty allocating a portion of each paycheck to your savings account. Sometimes the temptation to shop or go out on the town is too great. If that’s the case, setting up a direct deposit from your paycheck into your savings account can help you to make your financial future good on a long-term basis. If you don’t receive your pay checks through direct deposit, you can set up a date with your bank to transfer a portion of the funds in your checking account to your savings each month. This system treats your savings as an ordinary bill or mortgage payment: a necessary expense that you aren’t able to touch or spend. Out of sight, out of mind, right?

Review Your Accounts Each Day

To get a concrete idea of your spending habits and your total income, check in with your banking or budgeting app every day. You’ll be able to see your income, your spending, and your balance, as well as purchases that might have been ill conceived. Paying close attention to your financial details on a daily basis can allow you to keep track of your budget and keep you on top of any impending issues before they became a problem. To make your financial future good, you need to be vigilant; leaving your budgeting up to someone else or allowing it to evolve on its own won’t have the same benefits as being an integral part of your budgeting process.

Downgrade What You Can

Keeping up with the Joneses can be extremely tempting, but in the long-term, it actually has an inverse affect on the stable, secure future you actually desire. Downgrading your house, your car, or miscellaneous items you own can lead to an increase in your monthly buffer. Choosing a car that may not be the fanciest, but which ensures good gas mileage and inexpensive maintenance fees will allow you to have an extra bit of cash to add to your savings account each month. To make your financial future good in the long-term, you must be willing to sacrifice certain elements of your life that are too lavish for your income. Once you get in tune with a modest lifestyle, you’ll find that purchases you intend to buy become less and less lavish, as your frugality becomes a habit and your priorities sharpen.

That’s not to say you have to downgrade your life — establishing priorities and knowing what you want in the present and in the future can enable you to make wise financial decisions. If you really love your platinum gym membership, for example, you can:

Find a way to downgrade another facet of your lifestyle
Keep your gym membership but downgrade to a basic account
Seek out another gym that offers the same features of the platinum membership but for less

[Read: Is a Debt Management Plan Best for You?]

There are plenty of ways you can downgrade elements of your lifestyle without sacrificing things you truly care about — and while still keeping in tune with your monthly budget to make your financial future good (if not great) in the long term.

Celebrity Debt Scandals, And What We Can Learn From Them

October 19, 2015 by arizona

Most of the time when we hear about celebs and their money, it’s what they’re spending their millions of dollars on – new houses, fast cars and glam outfits. But every now and then a celebrity debt scandal rears its ugly head and we see that the A-listers aren’t always as fortunate as we may first assume. Some of the celebrities who have been forced to declare bankruptcy include:

Meatloaf
MC Hammer
Perez Hilton
Marvin Gaye
Michael Jackson
Willie Nelson
Larry King
Kim Basinger

So, who’s had money troubles recently, and how can we learn from these celeb debt scandals? Is bankruptcy as terrifying as it first appears, or can it actually be a good option to take?

[Read: Debt Consolidation Loans for Bad Credit]

Donald Trump

When thinking of Donald Trump, there are three things that spring to mind – hair, politics and business. So you’ll be surprised to hear that the business tycoon has filed for bankruptcy an astounding four times! Many astute entrepreneurs will tell you that taking on debt can be justified, if you’re using it to help to further your finances. Sadly, Trump didn’t spend wisely, and, to put it in basic terms, took on too much debt.

However, Donald Trump is now estimated to be worth about $2.7 billion dollars! So how has he managed to come out on top? Well firstly, each time he has filed for corporate bankruptcy, not personal bankruptcy. As a man with a lot of fingers in a lot of pies, this means that the losses on one company or group still allows his to profit elsewhere. Secondly, he’s used financial knowledge to allow him to restructure his companies’ finances rather than allowing them to have all of their possessions liquidated. This all comes under the banner of the legal nuances of different types of bankruptcy. (If you’d like to learn more about the different types of bankruptcy and how they apply to different cases, the United States Courts is a good place to start.) Donald Trump also uses his business acumen to reduce his stake in the bankrupt companies and to distance himself from ‘failure’, allowing him to concentrate on his public image.

The lesson to learn from this celebrity debt scandal is simple: don’t bite off more than you can chew!

Mike Tyson

I’ll avoid the temptation to mention anything about biting off more than you can chew when mentioning this guy! Mike Tyson has had a long and controversial career. This juggernaut should be lauded for his boxing prowess (he won 50 fights out of 58 in his career; 44 through knockout). However, it’ the stories from behind the scenes that have boosted his fame, and not always for the best reasons. At the height of his prominence Tyson had earnt a staggering $400 million, but he blew it all on lavish parties and fancy cars. In fact, it’s been estimated that he’s bought a whopping 110 cars, including Bentleys, Ferraris and Lamborghinis. As for unusual buys, Tyson’s shopping list includes three white Bengal tigers and a bathtub worth $2 million dollars! It’s no surprise, therefore, that Mike Tyson was forced to file for bankruptcy in 2003. From the sad tale of Tyson we can learn several things that apply to many celebrity debt scandals. Firstly, just because we can earn money doesn’t mean we know how to spend it. Secondly, there are people willing to come to us to abuse our name as well as our finances – we need to be able to spot the genuine people from the money-grabbers.

50 Cent

One of the most recent celebrity debt scandals to hit the headlines is that of Mr Curtis Jackson, also known as 50 Cent. The rapper, once reportedly worth $155 million, filed for bankruptcy in 2015 following a lawsuit involving a leaked sex tape. But is this bankruptcy case as bad as it may at first seem? 50 Cent certainly didn’t seem too concerned by the ‘b’ word, describing it as “reorganizing his financial affairs”. The lesson to learn from this particular celebrity debt scandal is that bankruptcy doesn’t necessarily mean losing everything. In this instance, Chapter 11 bankruptcy allowed the ‘In da Club’ rapper to reorganize his finances, rather than having his assets liquidated (as is the case with Chapter 7 bankruptcy.) It’s important to seek financial advice if you feel that bankruptcy may be the only option for you.

[Read: 14 Signs you’re headed For Big Trouble with Debt]

It may be easy to believe that celebrities who make the mega-bucks have it easy. But a poor understanding of finances, the wrong people around you and a penchant for splashing out on unnecessary luxuries can land them in as much hot water as anyone else.

Get out of Debt with a Debt Management Plan

March 10, 2014 by arizona

Once you have fallen into debt it’s like falling into a sea of overwhelming phone calls, letters and emails from debt collectors. Once these collectors have locked onto you they will relentlessly call you day and night in order to try to get you to pay up. These collectors are paid commission so they are motivated to get you to pay your dues or at least sign up for a payment plan.

The 2 Ways Out of Debt

Once you have acquired a large amount of debt it is difficult to get rid of. There are really only two ways to relieve yourself from the debt collectors which are unfortunately, either pay off the debt, or file bankruptcy which you probably want to avoid. However, bankruptcy tends to be a popular option, in fact, a 12 year study ended in September of last year which should over 1.2 million people filed for bankruptcy. However, this seems to be an unethical way of doing things. As those who filed did not handle their debt responsibly and basically cheated their creditors out of money.

A Debt Management Plan

If you wish to go about handling your debt responsibly and taking the ethical route, you will want to establish a debt management plan. You could create a debt management plan yourself and try to negotiate and deal with your creditors, or, you could hire a consumer credit agency in order to assist you in handling your debt management plan. Consumer Debt Agencies are not that difficult to find and usually every city or town has at least 1 or 2. However, if you happen to not be able to find an agency near you, you can find one on the internet. Just be careful that you don’t run into a fraud scheme, as there are many on-line. Before you decide to do business with these companies, research them and make sure they have good ratings and are accredited by the Better Business Bureau.

Debt Consolidation

If you use a credit counseling agency you will consolidate your debts in no time. You will be provided with a personal counselor who will look-over and review your financial records. Your counselor will then contact your credit companies and negotiate for lower payments and interest rates. Once this is successfully completed by your counselor and all your credit agencies have agreed to your payment plan your debts will be consolidated into one easy payment that you will issue directly to your Consumer Credit Counseling Agency who will then use the money responsibly in your debt management plan.

The Upside of a Debt Management Plan

One of the best upsides of having a debt management plan is that once your bills have been consolidated your over all monthly bills will be reduced from what you were previously paying out. Once your payments have been sent into a payment plan, you will no longer have to search through numerous papers and bills and risk missing a payment resulting in another late fee. With debt consolidation, you will have one quick and easy payment per month, until your payment plan is completed.

The Downside of a Debt Management Plan

Although there is a big upside of the reduction of monthly bills and the headache of sorting them out, there is still one downside to having a debt management plan and that is the fact that the average plan runs for approximately 5 years. In order for your plan to work out successfully you will have to manage your money more efficiently and stick to a long term budget. Once you have acquired a debt management plan, it is very important that you keep up with your monthly payments. It is likely for them to drop your plan if you miss payments and then it is very difficult to get the payment plans back. This will then put you in a much worse state than you were previously in. So, when dealing with a debt management plan make sure you have the proper amount of money each month to completely pay it. You don’t want to make your financial burdens worse.

Another Alternative

Rather than using a debt management plan many Americans are choosing to use a debt settlement. There are many reasons this is a more popular form of clearing debt and it is much more realistic and ethic than filing for bankruptcy. It costs less than Consumer Credit Counseling Agencies and other forms of debt consolidation loans. Thousands of families have already been helped by using debt settlement plans and maybe you could too.

It is no secret that the U.S. economy is in a type of financial crisis, although we are still a first world Country, we are losing jobs and falling further into debt more and more each day.

Is a Debt Management Plan Best for You?

August 29, 2013 by arizona

There are many stresses in a person’s everyday life. One of the biggest stresses that the average person has is debt. It can be overwhelming and sometimes feel like there’s no way out. In order to stay out of debt one should pay all their bills on time, while trying to pay them off to remove the debt. This isn’t always the option that we have available to us at the time. There is one way that a person can try to handle their debt when all else seems to have failed, that is through a debt management plan.

What

A debt management plan is a program designed to help an individual get out of debt in a way different than they are current trying. A debt management plan is similar to a budget, however it is designed to pay your debts off as well as increase your credit score.

There are many services offered by a debt management company to help you reduce or remove your debt. These services commonly include an introductory financial counseling session as well as negotiation with your creditors. The company will negotiate on your behalf trying to reduce the amount of your debt or how much interest you owe.

Who and When

It is important to know who can be eligible for a debt management plan as well as when it is the right time to find one. Any person with unsecured debts is eligible to create a debt management plan. Unsecured debts are credit card debt, payday loans, medical bills, personal loans, or consumer credit can qualify to enter a debt management plan.

When is the right time to find debt management help? This is a question that can only be answered by you. If you answer yes to any of the following questions you might want to look into receiving help through a debt management plan.

Do you have high interest rates?
Having trouble managing your current bills?
Have you failed in other debt management options?
Are you looking into filing for bankruptcy?
Do you receive phone calls from creditors?

Knowing that there are options might be a relief to anyone. Determine if you can be helped and then go search out help from a debt management plan.

Benefits

There are many benefits that exist when using a debt management plan. One thing that is benefited is that your credit won’t be harmed. Unlike many other debt solutions this plan is designed to improve your credit not harm it. There will be no penalty for using a debt management plan to your credit score.

There are many other benefits that can be accounted for in a debt management plan.

You are able to put all the stress of doing it alone away, as you will have the help of a professional.
Lowering the debt, interest, and penalties of your current creditors
You will only have one monthly payment rather than one for each creditor.
Getting out of debt faster and improving a person’s credit score
No longer have to worry about bankruptcy

With all these benefits it is hard to see why one would not chose a debt management plan from the beginning.

Choosing a Plan

Once you have decided that a debt management plan is the way to help you it is important to pick the right program.

Be sure that the plan you chose is within your budget. Don’t agree to something you can’t afford, you could set yourself up to fail. Be sure to limit your monthly payments any not put yourself into more debt than you started off with. Be sure to make all payments on time, defaulting can cause more trouble then you started with. Making payments on time and within regular expectations can help to increase your credit score.
Gain approval, when you are making any changes you need to be sure that everything gets signed and documented properly. Avoid verbal agreements, getting everything documented properly can make following the debt management plan much easier in the long run.
Ensure that you have gotten the creditors approval for any changes that you are making, even when beginning the process of obtaining a debt management plan. Your plan needs to be approved by not only you but your creditors as well.
Watch out for the fees from the debt management company. Some companies charge high fees. Others charge fees for enrollment, application, as well as for talking to a counselor.

Be sure to pick the best company and plan for you and your needs. Never let someone pressure you into a decision that can potentially harm your financial status. Enjoy the feeling of taking back your financial future with a debt management plan.

Best Way To Battle Debt Stress Through Debt Management

June 12, 2013 by arizona

Debt stress in a real problem for a lot of consumers. This is when you are overcome with the feeling of helplessness and panic because you feel like your debts are something that you can never get over. You feel distraught and depressed because you know that your income is not enough to support the payments that you have to make every month.

Debt relief is composed of a lot of efforts and one of them includes your attitude towards the payment program that you will adapt. You need to choose a plan that will allow you to override the stress that you are feeling so that you can concentrate on growing your income for your payment obligations.

One way to effectively deal with debt stress is through debt management. This program will allow you to enjoy the expertise of a debt counselor. They will help you create a debt management plan that will restructure your debt payments so it complements your financial capabilities. It will work around the monthly amount that you can afford to send towards your debts. Then, they will stretch your balance to meet your payment capabilities. The smaller your payments, the longer you have to pay off your debts – but it commonly does not go beyond 5 years.

The lower payments will help reduce your stress because you get to free up some funds to loosen the restriction on your budget. Either that or you can put it away towards your savings account.

The counselor will take over the negotiations with the creditor at this point. They will be the one to show the plan to the creditor for approval. Once they get the approval, all you have to do is to send the total payment to the counselor on a monthly basis. They will take charge in disbursing the fund to the various creditors that you enrolled in the program.

The single monthly payment will keep things easier for you and thus relieve some of the stress you are feeling. You can then concentrate on growing your income so that you have more money to allot towards your payments or to put away in your savings.

Your ability to save is probably one of the important habits that you have to develop to truly get yourself out of debt. Your reserve fund will help you take care of any emergency situation that needs financing. Not only that, it will also help you in case your main source of income is suddenly stopped.

The great thing about the lower payments in debt management is you can grow your savings faster. It can serve as a security net and will help you feel more at ease. You won’t have to be afraid of the circumstances that your future will bring because monetary wise, you know that you and your family will be well provided for.

How To Make Your Get Out Of Debt Plan Easier

June 1, 2013 by arizona

Debt is a tough situation to be in. You experience stressful nights and frustration because you cannot spend your money the way you want it to. That is because you have to prioritize your debt payments. The repercussions of ignoring your debt is too great .

But just as it is tough to be in debt, getting out of it is tougher. You have to exert self control, determination and discipline to be successful. The key to achieve debt freedom is to approach your debt relief with a plan. If you just throw caution in the wind and dive headlong into debt payments, you could find yourself losing your way as you progress.

Of course, making a plan is for nothing if you cannot follow it. Given that, here are a few tips to make sure that your debt out of debt plan is easier.

First, make a realistic plan. This can be achieved by basing it on your budget. Consider your income and the various expenses that you have when you create your budget plan. It is very important that you choose the priority expenses that you will pay off first and eliminate those that are not really necessary. The goal here is to know how much you can afford to set aside as your debt payment fund. While cutting back on your expenses is important, you should make sure that you will not overdo it. Try not to make your life too miserable.

Which leads us to the next tip in making your debt free quest motivating: do not completely remove fun activities. If you know that you need to spend on some fun activities, allow yourself to indulge and put that in your budget. Just shift your money around so you can afford it. There are many ways to do this. If you love the outdoors, look for cost efficient ways to enjoy that. If you want to hang out with friends, organize a backyard barbeque on weekends or a movie marathon day and have everyone chip in on the food. You get to spend time with them without the usual expense that it will cost to dine in a fancy restaurant.

Setting up milestones will also motivate you to keep on edging forward. Small successes provide encouragement for anyone going through debt relief. Reward yourself every now and then by marking significant achievements like a certain percentage paid off from your debt. These will help you keep your eye on the biggest prize – debt freedom.

Growing your income is also an effective way of implementing your plan. Of course, you want to find a way to earn without burning yourself out after your day job. Using your hobby to earn extra is a good way to go. Doing something you love will not really feel like work at all. There are also online jobs that you can pursue – that way you can work anywhere. Finding a passive income business will also allow you to bring in more money without exerting too much effort to do so.

By growing your income, you get to increase your debt payments and thus get out of debt faster. It will also allow you to put in money in your savings so you can make your financial security net stronger. The whole point of this is to motivate yourself so you are encouraged to complete your plan.

If things get too tough, use debt management as your way out of debt. You will be helped by a debt counselor who will assist you throughout the whole process.

Tips When Choosing A Debt Management Company

April 22, 2013 by arizona

Debt management is a legitimate debt relief option but you have to realize that there are companies giving them a bad name. Recently, there are two debt relief companies in Tampa that made the headlines because they are being investigated by the State Attorney General. These companies are giving the whole industry a negative reputation which affects the confidence of the consumers that should be benefiting from it.

The reality is, while there are sincere companies who wish to help struggling Americans get out of debt, there are those who only wish to fool others. They come under the pretense of concern, charge upfront fees then run away with the hard earned money of the hard working consumer. It is impossible to get rid of all of them so what every consumer should do is to know the signs that distinguishes the legitimate companies from the not.

To help you, here are the signs that will indicate that you are dealing with the wrong debt management company.

We’ve actually mentioned the first already and that is upfront fees. If the company is asking a deposit before they do anything, you have to run as far away from them. No legitimate company will ask this from you because the government strictly prohibits it. So anyone who is brave enough to ask this, you can assume that there is something fishy about them. Fees can only be charged if there is proof that the company was able to accomplish what was agreed upon during the contract signing.

You should also scrutinize the advertisements of every company that you deal with. For instance, a debt management company should never promise to lower your interest rate because this is never a guarantee. Perhaps the only guarantee is a lower monthly payment once the creditor agrees to the debt management plan that will be presented to them. This plan should be according to what your funds can afford.

During your first meeting with the company, be wary if they are proposing a solution even before they have seen your finances. Do not let them force you into a program if they haven’t even analyzed your debt problem.

You should also ask for a complete list of the charges that will be asked from you and when they should take effect. Hidden charges are also not allowed. Do not agree to pay any fees that was not discussed previously. It has to be very transparent.

Speaking of transparency, the process involved will have to be clear as well. The debt counselor should discuss it with you so you can decide if that is the type of program that you want to be involved in.

It is important that you familiarize yourself with the Telemarketing Sales Rule (TSR). All of the points that we discussed previously can be found in this law. It is implemented by the Federal Trade Commission or FTC. In fact, any complaints that you may have against any company can be filed to them.

And while you are at it, read about the other debt related laws like the FDCPA or Fair Debt Collection Practices Act. Knowledge will be your best asset against your debt problems and abusive companies so do your research well to know the rights protecting you.

What Is A Debt Management Plan

March 15, 2013 by arizona

If you are intent on going through a debt relief program, you need a certain plan that will guide you throughout the process. Almost all programs, specifically those involving debt professionals, involves a plan.

Credit counseling is a type of debt solution that involves a debt expert. These professionals are called credit or debt counselors. Once you get in touch with a credit counseling agency, they will assign a counselor who will immediately work with you and assist you in your debt relief efforts.

In this program, the plan that you will use is a debt management plan or DMP. Credit counseling actually ends with the counseling efforts but you can choose to extend their service further by enrolling your debts in a debt management program.

The DMP is the formal plan that will guide you so you can pay your creditors diligently. It lists all your unsecured debts and the respective monthly minimum payments. The goal of your counselor is to help you make lower monthly payments that you can afford. This can be done by stretching your balance over a longer period and by negotiating with your creditors to allow you to pay lower interest rate. The counselor will take care of all the negotiations and creditor communication for you.

You have to be careful to follow your DMP strictly because any late payments could result in an increase in your interest rate. And if you end your DMP before completing payments, you can expect that the rate will increase as well.

A DMP is typically 2-5 years long. It usually does not go any longer than that. During this time, you will send a single payment to the counselor. This is the total debt amount that your DMP indicates you should pay every month. The counselor will take care of sending the payment to the different creditors specified in your plan. You need to keep your payments on time so as not to compromise the effectivity of the DMP.

The creditor can note on your credit report that you are going through a debt management program but you need not worry because it hardly has any effect on your score.

Having a plan will benefit you because you are given direction as to what happens every month and every payment. You can see your progress every month and that can be motivating – especially when you are able to see significant changes in your debt balance.

However, getting yourself in debt means more than just owing money. It indicates a bigger problem that revolves around your financial management skills. Apart from sticking to your DMP, it is best to come up with a budget plan that complements your debt relief efforts. You need to identify the cause of your financial difficulties so you can work on solving that too. If it means lowering your spending every month, then do so. If it means changing your lifestyle so your income can cover your basic expenses, then that is what you should do. Your debt management plan can help you get out of debt but staying out of it is entirely up to you.