6 Ways To Relieve Yourself From Debt

It’s not easy to see your way out from under a mountain of debt. It’s discouraging, frightening and depressing. You might think there is no way you will ever find your way out of this mess, and it’s self-defeating to even try. Don’t lose hope! Even small steps can make a big difference, and if you stick with a plan, it can be a lot simpler than you think. Easy? No. But the end result is a debt-free life and is well worth the effort.

Here are six ways to relieve yourself from debt.

  1. Perform an honest evaluation. This is the first step toward debt relief. If you don’t know where your money is going, you can’t formulate a plan to get it under control. Track all your expenses for a week to a month. List every single penny and where it goes. Chances are you will see a definite spending pattern which will lead you to the next step.
  2. Cut unnecessary expenses. This isn’t a lifelong choice or a punishment, although the choices you make now might be easier to live with than you think. Cut the cable, stop eating out so often, utilize the library – there are thousands of different ways you can downsize to help you save money to put toward becoming debt-free.
  3. Evaluate your credit cards. One way to get yourself on the right track is to study your credit card picture and consider balance transfer credit cards to get you on the right track. Determine the best credit card offers for your situation, and make sure to check the fine print in the agreement. It’s easier, and less expensive, to consolidate your loans in one payment.
  4. While you’re at it… If credit card companies are calling you and harassing you constantly, take one of their calls and see if you can negotiate a lower interest rate, a freeze on late payment fees or any kind of financial break so you can get on your feet. Most companies would rather work with you than take a total loss, but you do have to talk to them about it.
  5. Speaking of credit cards… Avoid making late payments at all costs. This will really bury you. The late payment charges on top of the high interest rates are crushing. Make more than the minimum payments or you will never clear the principal. This should be your priority if you have a lot of credit card debt.
  6. Formulate a budget. Now that you know where your money is going, what the necessary expenses are and negotiated lower rates with your credit card company, it’s time to sit down and come up with a livable budget. Remember to leave yourself some wriggle room in case something comes up.

Step by step, and you can see your way to financial freedom and relieve the stress from being in debt. Once you make the first move, the rest becomes easier as you go. You can do it!

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A Loan in Shining Armor (and other stories)

In difficult economic times, most people are tightening their belts and restricting their spending to absolute essentials…that is of course, providing you consider a suit of armor an essential requirement.

When applying for a loan, the lender generally asks the reason for the finance, expecting to be told the money is for home improvements, a new auto or possibly to cover the cost of getting hitched.

In recent times, some people have asked their bankers to provide the collateral for them to undergo cosmetic surgery, with boob jobs and liposuction commonplace.

However it seems that not everyone opts to borrow money for such mundane purposes as a glimpse into the banking world has revealed a plethora of weird and wacky reasons for the request for cash.

Many of the cheapest loans on the market would not be available to those wanting funds for less standard reasons but it seems the increased cost did not deter people from applying.

One of the oddest motives for getting hold of more ‘moolah’ was the apparent need to purchase a suit of armor, not an everyday requirement for most people. The would-be knight was not going for the cheap Wal-Mart-option either, the armor was clearly of the designer kind at around $8000.

Everyone knows that foreclosures are on the increase and rental costs are rising, but this still doesn’t quite explain a $32,000 request to turn a dark and dank cave into a des-res.

Animals appear to feature quite heavily in the banking world’s list of less common reasons for finance and not just to buy a pedigree pooch.

Apparently to purchase a camel, an individual would need to borrow around $24,000 whilst a black stallion would cost $16,000. A Bengali tiger was also considered desirable accessory by another applicant.

The longing for a different lifestyle prompts some to approach banks hoping for the cheapest loans, with one infamous individual brazenly telling the salesman that she wanted to win an online auction to date a well-known footballing star.

People who wanted to ensure they left a mark on the world but didn’t have the money to live their dreams also resorted to loan applications to fund their fantasy.

In this particular example, the ultimate thrill was not sailing round the world, experiencing a trip to space or exploring the far flung corners of the globe…it was the ambition to bake the world’s largest cake.

Another hopeful applicant wanted to build a top-notch automaton so he could win the TV show, Robot Wars.

A 40 year old man in the UK wanted the chance to live out one of his unfulfilled childhood dreams and planned to use the loan money to travel to the US to meet Mickey Mouse.

Some motives for requesting funds were far more practical, if somewhat surreal. Wanting the opportunity to live forever is a hope that a lot of people share, but one loan applicant wanted to borrow the funds to secure his place in a cryogenics program so that his body could be frozen in time.

Whilst many of these reasons may sound funny and no doubt led to the loan being declined, it makes you wonder how many individuals tell lies about the real reason they want the money, just to ensure they qualify for the cheapest loans possible and get the cash agreed.

This has been a guest post from Money Supermarket.

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

There Is No Such Thing As ‘Good’ Debt

I’ve seen many sides of the debate on whether certain types of debt can be seen as good or not.  Obviously, from the title of my post you know where I stand on the issue, but let me explain why I feel that there is no such thing as good debt.

mb-checkbook201308Traditionally, debt gets categorized into good and bad debt.  Good debt has been identified as things like:

  • Mortgages – Good because you have a house to live in and (until the last few years) an asset that was more often than not worth more than what you owed on it.  Stability and comfort all played a role into identifying this as good
  • Student loan debt – Having a student loan most often meant that you went to college, which meant that you were able to increase your earnings potential, so student loan debt was often seen as an investment, so to speak, into future earnings. Positive investments are good, right?

I don’t disagree that those two items (and maybe others) have merits, but I still can’t see them as good debt no matter how you look at it.

Why?

One simple reason:

Debt in itself is not good.  Debt means that you owe somebody money.  Plain and simple, that sucks!

I might accept that those are ‘neutral’ debt or ‘OK’ debt, but the fact that I owe somebody money can never be classified in other things that I consider good, such as:

  • That’s a good looking Corvette!
  • I had a good time at your party.
  • Good dog!
  • You owe us some good money!

See how it kind of fell apart there at the end?  🙂

So, there’s my thought on why no debt can ever be good debt, no matter what good comes from it.  I’m not saying you should avoid it, because having a mortgage and getting an education might just be the best things you can do.  I’m just suggesting to separate the good part of that from the not so good debt that accompnies it.

What are your thoughts on ‘good’ debt?

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Student Loan Payment Countdown!

The 20th is the day that my wife’s student loan payments come due.  We have them automatically deducted from our checking account.

One of the payments is within striking distance of being paid off.  When we got married, it was the ‘larger’ of two loans, as it had the larger balance, the larger monthly payment, and the larger interest payment.  We aggressively worked to pay it down, applying ‘extra’ money that we came across at various points (including portions of our tax refunds, an inheritance, and my wife’s income while she was working) to bring the balance down.

In January 2009 it actually became the smaller of the two loans from an outstanding balance perspective, which was a great milestone.

We are now on track to have this paid off by the end of the year.  The December payment will bring the balance down to $0!

That will free up approximately $200 per month in payments.  We had originally planned on applying this balance towards the second student loan, which would allow that balance to be paid off around the end of 2012.

We are currently re-thinking this strategy.  Instead, we plan to just spend the money frivoulosly each month on electronics, video games, clothing and music downloads.

Cool, right?

Just kidding!

That’s totally not what we’re doing.

We are going to apply the $200 towards debt.  We may, however, apply that toward the mortgage instead.  The mortgage and the second student loan payment are the only two debts we’ll have.  The mortgage has a larger balance, a much larger interest rate, and while it won’t bring our payoff anywhere near 2012, it will eat the balance away a lot quicker than the student loan payment would.

In other words, it’s the instant gratification (well, as much instant as two years can be) or the more bang for your buck.  We still have a few months to make a decision on what to do with the ‘extra’ funds, but either way, we’re committed to applying the entire amount to debt once this particular loan goes away.

Any thoughts?

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