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It’s something that all of us want more of, and yet most of us aren’t equipped to make real changes in our finances so that we can have MORE MONEY.
This is especially true if we’ve found ourselves in debt through a series of unfortunate events.
Debt is a funny thing. If your in debt and your making your payments on-time (and…just barely make it). Creditors are reluctant to help you.
But if your delinquent, its another story. Not fair eh?!?!
But RELIEF does exist for those who are in debt. Additionally, there is help for those who want to get out of debt, but also, those who also want to eventually SAVE and THRIVE when it comes to finances.
If you’ve decided it’s time to revamp and even recover your finances, these 10 money solutions will layout the road-map to get you on the right road with your finances.
The Basic Finance Strategy I’m Going to Teach You:
- Identify your Debt and pick a method to GET RID OF IT!
- Saving Money Options, Stashing it Away and letting it GROW
1. Debt Renegotiation
If debt has really gotten a hold of your finances, you won’t move forward much until that’s resolved. If your situation has become dire, you might want to look into the options I describe below.
Debt Negotiation…is by definition a payment of debt that’s either being paid off over a longer period of time (than was originally agreed upon) or paying less than is owed on the original debt.
While there are some downsides – mainly that it goes on your credit report and is viewed as a negative by some potential creditors – however, the upside in some circumstances outweigh the downsides. The chief reason why CuraDebt, a debt assistance company, recommends this route is that it gives you peace of mind.
Working with a debt renegotiation company also alleviates the strain you feel when debt collectors call. KEY being, once you’re working a debt renegotiation plan, most debt collectors will call the company helping you renegotiate your debt instead of calling you.
2. Debt Relief
This category is actually related to the above, but is also in a class by itself. There’s personal debt relief and tax debt relief. They both deal in some way with releasing the creditor from debts owed. While many people think of debt relief in terms of bankruptcy that’s not all there is. While that’s certainly an aspect of debt relief, there are programs that exist that allow for the discharge of debts without bankruptcy.
Best Debt Relief Options of 2017
If you already know that debt settlement is for you, take a look at the best debt settlement companies of 2017 that came out on top during my research:
How To Pick the Best Debt Settlement Companies
The best debt settlement company isn’t simply the one that advertises the best average reduction in your debt. Results are certainly something to consider, but general transparency, fees, and customer support are among the other factors I considered:
- Accreditation: The best debt settlement companies are accredited by organizations including the American Fair Credit Council (AFCC), the International Association of Professional Debt Arbitrators (IAPDA), and the Better Business Bureau (BBB).
- Longevity: Companies that have been in business longer have more of a reputation to uphold and less incentive to engage in shady business practices.
- A clear, comprehensive website: You’ll probably have dozens of questions about the debt settlement process. The best debt settlement companies have clear descriptions of their services and fees as well as extensive FAQs.
- Low fees: The best debt settlement companies keep their fees low relative to the competition.
- Low minimum debt: The best debt settlement companies don’t shut out customers with lower total debts. While $10,000 is a typical minimum, the best companies will work with you even if you owe a bit less.
- A variety of debts: Nearly all debt settlement programs will try to settle credit-card debt and medical bills, for example. The best companies are also willing to try settling business debt, certain student loan debt, and even some very specific secured debt.
- A reasonable timeline: A typical debt settlement timeline is two to four years. The best companies can settle debts more quickly if you have the resources.
- Extensive customer support: It should be easy to get in touch with company representatives via phone and email. Online chat is a nice bonus. While free consultations are standard among debt settlement companies, the best companies assign you a program manager who functions as your contact and advocate when you sign up. They also allow online account management.
- Savings to you: Though what you save will largely be a function of how much you owe and to whom you owe it, the best debt consolidation companies should be able to save you at least 30% on your debt after their fees.
- Transparency of reach: States regulate debt settlement companies in different ways. Because of this, most companies only do business in certain states. The best debt settlement companies are forthright about where they do business.
Before you sign on the dotted line with these or any other debt-settlement companies, read on to make sure you know as much as possible about debt settlement. I’ll cover the debt settlement process, how it differs from other debt relief programs, risks, alternatives, and how to avoid scams.
Bankruptcy is usually the last resort for people with a significant amount of financial trouble, but it can truly provide some relief for people who have large amounts of debt.
Some bankruptcy plans do allow you to keep some material possessions like a car. Those decisions usually come with working with a Debt Relief Company, as stated above. If you think you might be on the verge of filing bankruptcy, the U.S. News and World Report suggests you should try doing this before you file.
This checklist of sorts will help you to sort out debt that can be managed and debt that is insurmountable. Taking these steps can also prevent some painful eventualities like car repossession due to late payments or worse.
Check out the List from US News and World Report:
- Take a close look at your budget
- Prioritize your payments
- Exhaust your other options
- Consider your credit score
- If its the right decision, don’t wait
- Get professional help
- Stay away from scams
- Try and keep your car and house after filing
- Hang in there
Finally, if after chatting with a counselor you decide to go this route, get it out of the way. Don’t procrastinate. The sooner you do it, the sooner you can be on the road to financial recovery.
4. The Comeback – The Emergency Fund
In the book “The Total Money Makeover,” financial guru, Dave Ramsey tells readers that they need to have an emergency fund. Ramsey suggests that everyone save a thousand dollars to put into their emergency fund.
Ramsey suggests that having an emergency fund prevents you from having to use credit cards and other credit tools to fund repairs like an unexpected furnace malfunction, car accident or medical bills.
The fund is to stay liquid, meaning that it should be in cash form and should not be spent except in case of an emergency. Additionally, if you do have to break into the emergency fund plan on replenishing it right away until you have a thousand dollars again.
5. Create Insurance Against Job Loss
Part of the reason why financial experts like Ramsey suggest that you stay out of debt is because debt makes you vulnerable in an unexpected economic downturn. However, there’s more to this equation than just staying out of debt. You’ll need a cash cushion, too.
After you save your thousand dollars for your emergency fund, you’ll next want to put some savings away for other events like job loss. BankRate.com suggests that the average person keep between three and nine months of income/ expenses in the bank for this reason.
Dave Ramsey further suggests that the self-employed may want more money than even that. Living on commissions means that you never know how much money you’ll have coming in. Having at least six months, but maybe nine or even twelve months of income socked away will help you weather financial storms.
This is why talking to a debt counselor for a FREE DEBT CONSULTATION of the recommended Debt solutions National Debt Relief, CuraDebt or Accredited Debt Relief to discuss your options and see your options.
6. Pay Off Your House
If you’re like most homeowners, housing is your largest budget category. That makes it a prime target for trimming as you work to dig out of debt. Paying off your house does a couple of things. It gives you one less bill to pay each month.
The best way to pay off your house early — besides inheriting a lot of money — is to pay extra on your mortgage each month. Any extra money you can put toward the mortgage will result in tens of thousands of dollars of interest saved and months (or even years) of not having a payment hanging over your head.
For example, if you can pay even 10% more each month, you will cut seven years and $107,000 in interest off of a $300,000 mortgage. If you can afford to pay more than 10%, you should do it. The bottom line is that no person will ever tell you that they regret paying off their house.
7. Saving for Big Events
Big events like a college education or a child’s wedding can cost you a great deal of money. If you had to pay for a $40,000 bachelor’s degree all at once, you probably couldn’t do it. However, you might be able to pay between $150.00 to $185.00 per month every month for 18 years.
That’s about what the breakdown would be if you socked away a bit of money for your child’s education from the day that he/she was born.
That number doesn’t include interest by the way. That’s just a straight payment. ($40,000/18 = approximately $2223 per year = $185.00 plus some change per month.) If you do add just 3% of interest to that same figure each month, you’ll actually end up with $57,000 and some change at the end of the 18 years due to compound interest.
8. Compound Interest
Ah yes, compound interest. As the example above shows, it can help you save money for a college fund, but it can do even more than that. It can ensure that you have enough for retirement.
In case you’re not familiar with the concept of compound interest, here’s what it is: Basically, the money you keep in the bank gets interest. The more money you put into the bank, the more interest you have.
But it also means that by keeping the money in the bank, the interest that you’re paid on it will eventually earn interest of its own, according to the Motley Fool website. Compound interest is what allows you to create a million-dollar retirement from $5,000 a year every year over 40 or 50 years.
9. Fun, Fun, Fun
Okay. Now we’re at the point you’ve probably been waiting for, the point where you can spend at least some of your money on having fun. You should always budget for at least a little fun. What those fun things are is up to you.
For some people, it may mean taking a cool vacation to an exotic location. For others, it might mean owning a classic sportswear. Yet, it could be something as simple as treating yourself to a daily latte at your favorite coffee shop. If you don’t use at least some of your money for fun, working become drudgery.
One of the ways to ensure that you always have gratitude in your life is to give money and time to others. From a practical standpoint, it does make sense. You can write the money you give to charity off on your yearly taxes. But that’s very often not why people give money to charity. It just makes them feel good. And it doesn’t have to be a lot. If you find your charity budget is limited, pick a couple of charities that are close to your heart and give to those.
Final Thoughts on Financial Recovery
Learning how to use your money wisely can be a life-long process, but it’s a worthwhile pursuit, despite the possible learning curve. Often money recovery starts with the understanding that it’s important to get out of debt. That may mean that you pay extra each month on your bills until they’re completely gone. It may also involve more drastic measures like debt counseling or even debt renegotiation.
This is especially true if you have a high amount of business debt or even a tax debt. A debt counselor from CuraDebt can guide you in these pursuits. Once you overcome that debt hurdle, you’ll want to move into the savings and building phase of money care. This can start with an emergency fund and be followed by various savings plans that ensure you have money for a rainy day as well as retirement.
Finally, you should be able to look forward to the day where you earn enough money to play a little. Whether it means going on vacation or spending a few dollars on a daily latte, having money to spend on yourself keeps your spirits up. And of course, having some extra money means that you can also give to your favorite charity. This ultimately makes your work-alike worthwhile.