Momay's Blog

We all want to live comfortably: buy our own picket-fenced house somewhere in the suburb, own a car or two, purchase beautiful clothes and shoes, send our kids to the best schools there are, and save money to tide ourselves in the future.

We work hard and plan carefully in order to achieve all these. We budget our money, do away with the luxuries and invest all in the name of these aspirations.

Or at least, we try to. There are times when the pull of acquiring better things completely overpowers our ambition of financial stability. We want something with more spark, glitter and splash. Instead of settling for something that is already nice and affordable, we dare to reach above means and suffer the consequences as a result: Many Americans have more debts than they can afford to pay, while the unpaid credit card loans in the country have been steadily been in the incline for the past few years.

It’s not a pretty picture from afar, and less so by close inspection. Those who have unpaid bills will tell you how the situation has stressed them out and depressed them. Just thinking of the next month causes them to worry and fret about the bills that are again coming their way.

As someone who succeeded in finally paying off his debts after going through all the pains and sleepless nights, I have gained a fair share of what-to-dos and what to avoid.
Here’s the thing that sealed the deal for me.

Know the options available to you. Despite what you think, there are a lot of companies that offer programs to keep your finances on track. Some will offer loans, negotiate with your creditor for you, or offer advice.

One of the things you will keeping hearing while scouting for options is the phrase consumer debt consolidation.

This scheme is a great help to multiple credit card holders like you, or even to those who have lots of loans. You can get good advice on consumer debt consolidation from a bank or credit union.

They will teach you how consumer debt consolidation not only merges your debts into one account, but also lowers the interest rates you have to pay.

Here are things that can help you out:

1. Keep track of your finances. Even if you haven’t reach your credit card limit yet, just knowing that you’re already having a hard time paying for your loans is enough of a reason to keep a tab on your purchases. Avoid splurging, and if possible, avoid paying with your plastic money. Credit cards always have interest rates, so the lesser you use it, the lesser your monthly dues.

2. Be a wise shopper. You know how sales often seem to creep up when you don’t have money? You think this is such a great deal ? I’m getting $50 off of these gorgeous shoes that I got to have it ? well think again. The fact is you’re still shelling out hard-earned cash on this purchase. Cash which could easily go into paying the mortgage, or the credit card bills that’s been piling up on your drawer.

3. Stay away from e-Bay. True, there are a lot of interesting stuff for sale on this on-line store. But you’ve got to acknowledge that these things are just for show and are not really useful at all.

4. Avoid transferring your balances from this credit card to another. They might have interest-free transfers, but in the end, this is not the solution to your problem.

It’s consumer debt consolidation coupled with wise spending that will spell the difference between success and failure.

About the Author:
Article written by Jessica Bradbury, you can learn more about designer perfumes from her website.

I can see you rolling your eyes now, ‘How To Reduce Debt By Being Smarter With What You Have’, you’ve heard it all before, it’s a real no brainer, who doesn’t know that? But the trouble is most people aren’t actually doing it. And here’s the kicker, debt can be your very unpleasant companion no matter what your income, so it’s not just about what you earn, it’s about how you manage what you earn.

One of the best ways to reduce debt is to repair the money leak that’s caused by your spending habits. Let’s take a moment and check them out. For instance, do you buy on impulse, do you buy things you don’t really need, or buy to keep up with fashion, your friends or even to keep up with the neighbors. Are you digging yourself into a financial hole as you wander around the mall buying whatever takes your fancy. Do you take yourself off to the stores when you’re feeling a little down, or in need of a treat, or do you cruise the infomercial channels and e-bay from the comfort of your lazy-boy buying, buying, buying?

But you’re not off the reduce debt hook yet. Check out your book shelves, wardrobe, kitchen cupboards and garage for those ‘things’ you just had to have, those ‘things’ you just couldn’t live without. How many books have you bought, maybe on how to reduce debt, and never read, clothes that looked great in the shop but you’ve never worn, gadgets you’ve used once and now live in the back of the cupboard, electric tools that gather dust in the garage, and the favorite of every e-bay or infomercial shopper, fitness equipment. Come on, I know you must have at least one piece of fitness equipment lurking around covered in dust, you could reduce your debt by selling these things on e-bay to someone just like you!!

But back to what I was saying, if any of this rings true for you then it’s time to do whatever it takes to put things right. You know that continuing down the slippery slope of spend, spend, spend, is only going to make your financial dominoes fall even faster. Do you follow me so far? Quite simply if you don’t make some changes to your spending habits, nothing will change, your debts will stick to you like glue, and what’s more they will grow. Now I’ll concede that change isn’t always easy, and squeezing those ‘’reduce debt strategies’’ into your time table may not sound very appealing. But here’s a suggestion to get you started on reducing your debt that only required one thing, inaction.

Here’s how easy it is. If there’s something you want to buy, no matter the cost or who it’s for, just wait, yes that’s right, don’t do anything, just wait. And wait for at least 4 entire days. While you’re waiting calculate how long you’ll have to work in order to pay for this thing. Let’s say your ‘thing’ is going to cost $60, and you’re paid $20 an hour, you’d need to work 3hrs to buy that ‘thing’. But hold on a moment, the $20 is your pre-tax hourly rate, and let’s say you pay 25% tax, that means you'll need to work 4hrs to buy that thing, is it worth that to you? And this might be hard to swallow, but do you have other debts you need to pay off before you buy any more things?

Let that sink in for a minute. Well OK, the 4 days have passed by and you still want this thing. If you still believe you must buy this thing, consider this before you go get it. Can you get it for a better price somewhere else, can you rent it, borrow it or modify something you already have. Can you get someone to buy it for you as a birthday gift (why not?) hey you’re here to reduce debt not to add to it so I’m pulling out all the stops. Now only you know what your budget can stand, so if you still want to get this thing after all of that, and your budget can stand it, then go get it. But remember you came here to reduce debt not to add to it. A few last words of encouragement, read this again and then read this again. Good Luck.

Loosely defined, debt consolidation is the combination of most or all of your debts. These debts are typically from unsecured credit cards and can be rolled into a single payment that is normally much lower than the sum of the payments you are making now. So how do you determine if debt consolidation is the right solution for you?

Debt has a way of sneaking up on you. Mortgage loans, auto loans, credit cards and even your medical bills lead you into severe hardship. But it is possible to get out of that situation and become debt free in a relatively short time.

You may be required to restructure your spending habits and/or lifestyle. You can do this by consulting a debt counselor.

At first, you may feel a little unease, but the end result is well worth the adjustment. Just think how you are going to feel with all your debt wiped clean. You may also gain a tax advantage as the interest on a consolidation loan for your home might be deductible on your income tax return.

First, you must understand what a debt consolidation loan is. Debt consolidation loans make it possible for you to pay several accrued debts with one low payment. Reasons to consider a consolidation loan include:

To secure lower interest rates.
To secure a fixed rate on those debts.
To achieve the convenience of managing a single payment opposed to several. It’s just easier.

Debt consolidation loans can move a number of unsecured forms of debt, like credit card debt, into another unsecured type of loan. Most often, though, the consolidation loan is secured with an asset, like a home or a car.

This asset serves as collateral and you agree up front to the sale of that asset in the event you cannot make the payments for any reason. By using collateralization, the lender will most times lower the interest rate. Without the collateral, your rate could soar.

In some cases, debt consolidation companies are able to discount the loan amount. If the debtor is facing the possibility of bankruptcy, a debt consolidator may purchase the loan from the original lender at a discounted amount.

The interest rate on debt consolidation loans may be higher than those on home equity loans but they are still significantly lower than ANY credit card APR out there.

For example, if your debt is divided between several cards, you could have interest rates anywhere from about 8% up to as much as 32%.

In some cases, where the debtor has a good credit rating AND a decent amount of equity built up in their home, you can expect rates close to those for a first mortgage. Presently, that stands around 7%. On the other hand, debtors with a poor credit rating can look for rates to rise significantly, probably in the range of 15% to 18%.

Most credit counselors offer a free consultation via phone. Take advantage of this and you could find yourself with some freed up cash every month.