By Bill Avenell
At the time of writing this article the recession is starting to bite at the heels of many families with job losses and the incapacity to service home loans, credit card debts and hire purchase installments. Many are really feeling the financial pinch and do not know where to go for help. Others feel that it is a stigma on their character to seek help not realizing that help is the very thing they should be seeking.
The main key to debt management and debt reduction is realising that you are not alone with this problem and that there are many good people and organizations who will offer their services free of
charge to help you become debt free. There are other organizations that offer debt consolidation programs so that all your debt is placed, as it were, in one basket and regular monthly payments are made to pay the collective debt off.
There are a number of ways in which you can deal with debt reduction and manage your finances.
First - Realize you need help because if you delay it tends to compound the problem. Swallow your pride and seek help from someone to whom you can make yourself accountable and who will support you through the process of getting your finances in order. This may be a family member, friend or a professional.
Secondly - Do not incur any further debt. Learn to prepare a budget and live within it. Base your budget on your base wage if you are still working and any overtime you may get can go towards either paying off your debt quicker or saved to give you a backstop. Do not spend it on non necessities. Your budget may be tight but will pay dividends in the long run.
Thirdly - Contact your creditors if you cannot manage your current installments. You may need your support person to go with you or you can write them if you feel confident enough to use that means. Either way you need to have a witness to any agreement you may make regarding the re-negotiation of your repayments. Most firms will appreciate the honest approach and will make some adjustments to ensure the debt you owe them is paid in full. By approaching your creditors it does not go against you as it could do if your indebtedness was put into the hands of a debt collecting agency.
Fourthly - Into your budget build in an amount for a treat i.e. tea out somewhere (not too expensive though!) to reward yourself for sticking to your budget and keeping your repayments up to date. Say a treat every 2 months.
Fifthly - Work on the smallest debt first, and once that is paid off put the money you paying of that towards the next smallest bill and so on. Ensure you maintain your regular monthly commitments to reduce the overall debt.
Finally - If you are unable to make a monthly payment because of an emergency i.e. illness or accident, then let your creditors know immediately so that they do not send the debt bloodhounds after you and you incur a bad credit rating. Communication is imperative.
Most debt, however bad it may appear, is manageable if attended to in bite sizes. Do not concern yourself with what you cannot do but just do what you can to haul in that blossoming debt balloon and deflate it.
Bill Avenell is an internet marketer who writes and provides articles on various topics. More assistance on debt reduction and debt management can be found at http://www.internetreviewsonline.com
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