Hundreds of books, expensive seminars and rigorous debt management plans are offered every day, often with complex and hard-to-follow rules that may not be practical for most people. One of the most obvious examples is the “save ten% for a rainy day fund” idea. Good advice! But if you’re in a situation where it takes over 100% of your income just to pay the bills and survive from one day to the next, that is a strategy that has to be put off until you get things under control.
When debt is seemingly unmanageable and the strategies offered by the financial planning gurus just will not hold water, you need some simple, proven debt solutions to get your plan jump-started.
Debt Solutions Come from Simple Diligence and Awareness, Not Magic
At times money may seem like magic; if you do not keep your eye on it, it can feel like it disappears into thin air without explanation. Ever thought you had a couple of twenties in your wallet, then opened it to find only a few singles? Just like when a magician makes a rabbit “disappear,” your money really does go somewhere.
Learn where that money is going. Get a fifty-cent pocket notebook, and carry it with you for one full month. There are also smartphone apps that accomplish the same thing, such as Orange Arts’ Monthly Expenses, available at the iTunes store for $0.99—a bargain, but don’t rush out and buy an iPhone if you don’t already have one!
Spend money as you normally would, but every time you spend money, enter it into the notebook. Write down every expense, no matter how large or small—every time you buy a coffee, run to the store when you find that you are out of bread, or enjoy a guilty pleasure of that chocolate chip muffin. Do not leave anything out at all.
At the end of the month, assign every single line item into categories—food, snacks, restaurant meals, clothing, gasoline, etc., and total it up. Once you see the numbers, you start to get the idea that the rabbit is just hiding under a secret compartment—and you’ll now know how to get control over the situation.
Credit Card Debt Solutions Can Be As Easy as Picking Up the Phone
Bill collectors can be intimidating, and nobody likes an unpleasant phone call. But before your debts get escalated to the more aggressive collectors, your original creditor will try to contact you. It is tempting to hide, not pick up the phone, or stuff those envelopes to the bottom of the pile. According to an FTC report, “Knee Deep in Debt,” it is more likely that if you contact your creditor immediately, a solution can be found that you can live with. But once that account has been turned over to the debt collector, it’s too late, and you can expect more aggressive collection measures.
Simply speaking up can save you a lot of grief in the long run.
Debt Solutions You May Never Know About Unless You Ask…
You would be surprised about what you can get if you just ask, but many people never take the opportunity to do just that. The best debt solutions include a strategy for asking for something you would not otherwise get. Call every one of your credit card companies, and ask for a lower interest rate. Chances are, you will not have a 100% success rate, but one or two may just grant your request —and that will help you achieve those debt solutions quicker.
At the same time, do not be afraid to ask for extra accommodations if you are going to be late. Sometimes credit card companies have special programs that let you skip a payment. They do not usually advertise them, but you will not know unless you ask.
For example, did you know that you may have medical bills that could be eliminated with a single phone call? Many people find themselves with medical debt after the insurance company denies a claim. But don’t assume that the insurance company’s word is final! Most insurers have a customer service line, and most denied claims are based on simple miscommunication. You have a right to appeal, and a right to receive a written denial that explains the reason. With your legal right to access your own medical records, you can form an appeal—and have a good chance of having the decision reversed and the debt shifted back to your insurer!
Understand the Difference Between Good and Bad Debt
The Motley Fool’s “60-Second Guide to Getting out of Debt” tells you to know the difference between bad debt, and “OK” debt. Those high-interest credit cards that charge anywhere north of 14% are “bad.” First of all, don’t use them any more, and second, pay off those high interest cards first for an optimal credit card debt solution that will get results faster.
Sometimes the solution is not as hard as you think it should be. Simple debt solutions may be right in front of you, all you need to do is take the time to look, and act on them.
Today, there are a number of debt relief solutions that help consumers in every type of financial situation. Find out which debt relief solution will work best for you.