Free Tips on Eliminating Debt

How to talk to Creditors – and avoid breaking your bank

Filed under: Debt — Sabine @ 12:53 am

A Better Deal – but Don’t Break your Budget

How to Talk to Creditors Who Call

You probably have seen the commercials about the harassing creditors and have thought that is you. Some days you may not even want to answer your phone. Why is that?

It usually is because some of the creditors you deal with are not very negotiable. If you encounter a problem like this it is best to find a professional who is qualified to help you receive lower interest rates, settle on a reduced amount to be paid in full, or help determine reasonable monthly payments.

That is an extreme situation, however. Most creditors are happy to at least get you on the phone, and all they really truly want is an answer.

If a creditor phones you to ask you when you will be able to pay a bill do not say “I don’t know.” Saying “I don’t know” is the fast track to an unpleasant argument.  Instead, if you are on the phone with them say you will pay it on a specific date-even if you do not know if you can.

The only exception would be if you are required to put in writing when you will pay your debts. In this case tell them something such as you will call your accountant. Then, set a date when the creditor can call you back.

Dealing with Different Types of Creditors

Of all the types of creditors to deal with, student loan companies are probably the easiest to negotiate with. You have several options before you even become near being in default.

You can obtain a forbearance, receive a deferment (no-interest grace period extension), or simply send in an amount you can afford. They usually will work with you and usually these type of lenders are easy to negotiate with and usually do not require a professional.

The hardest creditors to deal with usually are the credit card companies. They usually are very rigid-even if you are a faithful customer who has paid every month for several months.

About Debt Negotiation Help

Different types of debt negotiation help include credit counselling, dept management plan, and debt consolidation. Bankruptcy is another option, although in most cases is a last resort. Please see the definition list below for further explanation:

Credit Counselling: One or more consultations scheduled in order to discuss your financial situation as a whole. Credit counsellors will usually ask you some questions about the amount of money you make and help you be accountable as you devise a reasonable monthly budget. Your new financial plan (budget) usually will involve the allocation of money toward repayment of past debts.

Debt Management Plan: This is a specific system used by professionals to help people calculate how much of their debt they can pay back per month. This system is usually based on a certain block of time, such as two, three, or five years.

Using this type of repayment plan your financial counsellor usually will handle all of your money. All you need to do is deposit it in an account set up by your debt manager (financial counsellor).

This system of repayment can be costly, as you need to pay the person who manages your debt for their time. However, often non-profit organizations and churches offer reduced-fee plans for low-income people.

Debt Consolidation: This is the process of combining all your debt together (usually unsecured ones like credit cards and quick loans) in order to only have to make one monthly payment. Financial counsellors will usually calculate the anticipated payment schedule of consolidated loans in order to determine if it is worth it for you to consolidate.

If your new interest rate after consolidation will be lower than it would be worth it to combine all your bills. If not, then you probably should not consider this option.

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7 simple ways to save money – you can start today

Filed under: Debt — Sabine @ 12:48 am

Are you feeling the pinch in your pocket? If you are, you are certainly not alone. Millions of people are feeling the effects of an economic downturn, environmental uncertainty and a slow job market. Saving money has never been so important in some households than right now.

1)      Cook your own dinner

One of the simplest ways to begin to save money is to get into the habit of cooking often at home. Even if you don’t know how to cook or think you may not like it, eating out is by far one of the most costly pleasures that many of us indulge in. Unlike a major purchase or a vacation, it can be hard to keep track of how many times we eat out every week or how much we spend on that smoothie, latte or brunch.

JUST A LITTLE TIP: keep a journal for a few weeks and write down every time you spend even only 1 dollar on eating out – yes even that little ice cream, hot dog or…..  You will be surprised how much money you are spending!

2)      Brown bag it to work

Speaking of eating out, work lunches are another of those invisible drains on our wallet. Eating out for lunch often does not feel like eating out because it is usually not a pleasure outing. You are simply filling up before heading back to work. But if you are like most people, it can be very easy to eat out several times a week without even realizing how much money you are spending on lunch. If you’re serious about saving your hard-earned cash, make it a priority to bring your own  bag your lunch at least three times a week. If you still need incentive, sit down and do the math. Once you have seen exactly how much you’re spending just by going to work, you might feel differently about brown bagging it.

3)      Make a shopping list (and stick to it)

Without a list, there is a very high chance that you will buy items that are not urgent or even necessary One of the biggest mistakes that most of us make before going shopping is that we arrive at the store unprepared. It can be very hard to resist temptation if you arrive at the grocery store without a plan of attack. You may even leave the store without buying one or more of the items you came to buy! Before heading to the grocery store, make a real effort to sit down and make a complete list of everything you really need. Don’t rely on your excellent memory and cross off each item as you move along the aisles – and try not to buy anything you already decided you don’t need!

4)      Stock up on perishable items when they’re on sale

Be savvy when you go shopping. You will always need certain items: toothpaste, toilet paper, shampoo, cereals and other common household goods are good things to stock up on when they happen to be on sale.

5)      Use your local library

Maybe you haven’t stepped inside a library since . . . ever. If you are not familiar with the modern library, you will probably be surprised about what you’ll find inside. Free internet use, new release movies, bestsellers, free movie nights-many local libraries offer numerous opportunities for free entertainment. Remember that your taxes pay for the library, so go ahead and use it.

6)      Make comparison shopping a habit

No matter what kind of purchase you’re making, large or small, the smart consumer always does a complete price check. Whether you’re planning on buying a new book or a new car, simply checking online and making a few calls can save you a lot of money.

7)      Get organized

One of the easiest ways you can save money year-round is by becoming more organized. Organize your monthly bills, credit card accounts, shopping lists, clip coupons and organize all of these in one easily accessible folder. Save money on unnecessary late fees and don’t overpay simply by organizing your financial papers and accounts.

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