Debt is an insidious trap that affects the lives of millions of people. It usually starts out small, but as it builds up over the months and years it can turn into a devastating problem.
1. Reduce Your Dependence on Credit Cards
This is more about preventing future debt, but that is an essential part of reducing the debt you have. If you have dozens of credit cards or even a half dozen, it is very hard to keep track of your purchases.
The best way to develop responsible spending habits is to get down to one credit card. This can be used for emergencies or situations where a credit card is the most convenient way to make a purchase.
2. Cut Back on Spending
This is difficult for many people, but it’s essential if your goal is to get out of debt. Even when it comes to necessities such as food and shelter, it’s often possible to save money in creative ways.
For example, when you buy groceries you can save a great deal by buying items in bulk. You can also look for bargains and use coupons.
3. Create a Budget and Stick to It
If you don’t know how much you’re spending from day to day, you are probably overspending in certain areas. A budget should be divided into the main categories of food, bills, housing, and entertainment.
Figure out what you can afford to spend in each category so that you are not behind at the end of the month. Then come up with a plan to stick to your budget.
4. Consider Declaring Bankruptcy
The idea of declaring bankruptcy is never appealing, but in some cases, it’s the best solution. If you are facing a large amount of debt and have no realistic way of paying it back, bankruptcy may be the most practical path to take.
In order to assess whether or not this is something you should consider, you should consult with an expert. You can locate a qualified bankruptcy attorney online. For example, if you live in Nebraska, simply search for an awesome Bankruptcy Attorney in Omaha and see which professionals are available in your area. Bankruptcy can be a way to wipe the slate clean of all your debt.
How to Decide Which Debts to Pay off First
If you, like many other Britons, are struggling to manage multiple debts, it can be hard to know which one to tackle first. Whilst some lenders may shout louder, phone more often and write to you many times, this does not always mean they are the ones who need sorting out first.
This handy guide should help you decide which debts to pay off first, as well as provide some advice on dealing with the debts you will need to leave until later.
Don’t risk your home
The most important debts are those that use your home as security for a loan. If you owe money on your mortgage, your bank could potentially take action to repossess your house and sell it in order to clear your debts.
If you have other debts secured on your property, these should also be a priority, as your home could be at risk if you do not keep on top of the repayments. If you are currently renting, any rent arrears should also be sorted out as early as possible.
If you miss more than a couple of payments your landlord has the right to go to the County Court and have you evicted from the property.
Death and taxes
Taxes should be another high property for you. If you owe your local authority council tax, they might not have the resources to write to you as often as your credit card company will, but they will take action a lot quicker.
Councils tend to work quickly to take the debt to the court, meaning you could face court orders or even County Court Judgements if you fail to pay.
Similarly, not paying tax or National Insurance, or not paying back overpaid tax credits could land you in hot water with the law, so try to arrange a repayment plan early in the process to avoid any further action being taken.
If you owe money to your utility company, chances are they will eventually disconnect you from the service. This could mean losing your heating, lighting, and appliances at your home and potentially risking your health due to living in cold and unsanitary conditions.
Providers are usually very understanding of customers who are having difficulty paying, so talk to them about the problem and they will arrange an affordable repayment plan for you. They can sometimes give advice on using less energy to help you cut your bills, or even put you on a lower tariff to help you save money.
Of all the other types of debt, the most important ones are your hire purchase (HP) debts. If you have a car on HP that you need for getting to work, you will need to make payments towards this debt to avoid having your car taken away.
Credit cards do need paying, but should be tackled thoughtfully to help you pay the debt quicker and at a lower cost to yourself. If you can transfer all or part of the balance of your highest rate interest credit card or store card to a low or zero interest card, this will help you pay the debt quicker.
If you are struggling to make the payments, you could go to a debt management company or a charity that can help you negotiate an interest freeze and affordable monthly repayments with your creditors.
Debt Reduction: How to Save on Home Décor
Spring is here, and that means it’s time for some cleaning and new décor. If you are redecorating on a budget, don’t despair. There are plenty of avenues leading to quality furnishings at a price you can afford. Use the tips below to help you on your cost-cutting journey. Saving is easier than you think.
- Find a good carpenter. The price of furniture can be outrageous, especially if your search is limited to chain stores. Skip the markups by finding a good carpenter with reasonable prices. He may be able to install custom-made bookcases and improvements for a fraction of the cost.
- Shop locally. Speaking of markups, who says you can’t find better prices in your own backyard? Do a search for locally-owned businesses and see what they have to offer. Many mom and pop stores sell handmade home furnishings at a discounted rate. The result is better quality at a bargain price. You can’t lose.
- Find designer brands at bargain prices. If you crave the style of a specific label, step out of the department store and go elsewhere to find it. Shop at the outlet malls for discounts on the coveted brand of your choice. Retailers like Marshalls also carry bedding and bath labels for less (e.g., Calvin Klein, Hotel Brand, Ralph Lauren, etc.)
- Do it yourself. Creativity is your biggest asset on the road to redecorating. Cut out the middle man by taking home improvement into your own hands. If you possess a talent for sewing and/or refinishing, tackle the following projects:
- Drapes. Shopping for window treatments is an expensive endeavor, costing anywhere from a few hundred to a few thousand dollars. Forgo prefabricated items by finding a fabric wholesaler and get the look you want for less. The web is home to thousands of online stores that offer countless fabrics at bulk prices.
- Pillows. A single pillow at Pottery Barn can cost as much as $89.00. Why spend so much on cotton and fluff? Sew your own custom designs from fabric bought at the same wholesaler. A little technique will provide you with professional-looking pillows for less than $20.00 a piece. Who can say no to those prices?
- Furniture. Beautiful furniture is expensive, especially if you’re looking for solid wood and intricate craftsmanship. You aren’t likely to find a good deal at a high-traffic antique store. Instead, shop around at the flea market or second-hand store. Arm yourself with some research about your intended purchase to help you spot a good deal. While your initial finds may be tarnished and damaged, a little sandpaper and varnish will go a long way.
- Make the most of what you have. With refinishing in mind, why not take the opportunity to utilize your existing stuff? Revamp an old chair by learning how to reupholster it. If you’re tired of an old headboard, consider distressing the wood or repainting it to add new life. Do you hate your floors? Sand them down and stain them with a new color to suit your tastes. The bottom line: a fresh look doesn’t require an endless budget. Use your resources to create a new perspective.
5 Places To Find Money For Paying Off Debt
Is your business facing a daunting amount of debt? Managing debt is an important skill in the business world. Remember that not all debt is bad; debt invested in a promising future is actually desirable.
However, when it comes time to pay off that debt, sometimes we need a few extra options. Here are some ideas that you might not have thought of as parts of your solution:
Sell Outdated Equipment
If you have any equipment lying around unused, sell it. It’s taking up space and equipment can bring in a good amount of money if sold reasonably.
At the same time, look at the equipment that you are using. Can any of it be spared? When facing debt, it is a good time to look at the efficiency of your business model and business operations and cut out all of the unnecessary parts.
Scrap Outdated Equipment
Another option that many don’t consider is scrapping equipment. If you have equipment that is too outdated to be sold for a good price, has missing pieces or includes damaged parts, scrapping it for metal can still give you a good value for it all.
Decrease Office Space Used
How big of an office space do you really need? How many offices do you really need? While decreasing office space may make the atmosphere a little less comfortable and a little more cozy for your employees and yourself, saving space is saving money.
Real estate is expensive and your employees should understand that. Consolidate some of the office space that is used and save some money on rent.
Lease Out Unused Office Space
If it is an option for you, you can also lease out your unused office space and collect some rent money yourself. This might cause some extra hassle in managing all of it and dealing with the operations involved with leasing out your unused office space. The inconvenience is simply the cost for the extra income.
It’s time for you to collect payment from customers that have fallen behind on their payment. Time is of the essence for you at this point, and you deserve to be compensated for the services that you have provided already.
It isn’t a comfortable situation to call someone up to ask for money, and if they aren’t quite cooperative the task might turn out to be rather difficult overall, but remember that, while the customer always comes first, their payment is something that you deserve since you’ve already provided them a service.
Because it’s important to pay off debts sooner rather than later, it might be worth it to talk to some of your customers about submitting payment a little earlier than previously planned. You can offer them discounts if they pay early to incentivize this.
Keep in contact with your suppliers and see if you can figure out anyways to get some discounts if you cut some corners and make some concessions.
New Sources of Revenue
Reevaluate your business model. Are there any untapped markets that you might have overlooked that you can incorporate? If you could seriously broaden your reach successfully to another market or audience, this could positively impact your revenue now and in the future.
If you included consulting or a similar service on the side, it could also bring in a new source of revenue.
Stay level headed and goal-oriented and things will work out. Believe in yourself, your vision, and your company.
Five Ways to Restore Your Finances After a Big Spend
Spending a lot of money may not be something that you like to do, but it’s an action you need to take from time-to-time. After you have made a rather costly purchase, what are some steps you can take to restore your financial situation and make it whole again?
Consider The Spending Source
First, you should analyze whether you were the one who should have paid all of that money. For example, let’s say that you were injured in a car accident, and you had to pay for the hospital and doctor bills. Consulting with a personal injury lawyer in Louisville is a smart idea. You might find that you are not responsible for some or all of the charges.
Craft a Reasonable Budget
Once you have come to terms with the reality of your financial situation, you need to set a budget right away. Do not delay it for yet another day, or you might find yourself with financial problems once again. Do not estimate how much money you make either. Be sure that it is detailed and accurate. Put in a line for your savings account and spending money to ensure that everything is accurately accounted for.
Start to Pay Back The Debt
Whether the big spend was on your credit card or you stopped making card payments to afford it, you need to get right back on track with these payments. When you start to miss credit card payments, you are really jeopardizing your financial future. Your credit score could plummet all the way to the ground. Consider loan consolidation if your debt is really immense.
Use Credit Cards to Your Advantage
Now, some people are not able to use credit cards at all, or they will fall victim to the cycle of debt. However, if you have control over your spending, start to use the rewards. For example, let’s say that you have a $5,000 balance on one of your cards. You can charge a $100 purchase but pay it off literally that minute. You can still build rewards points without increasing your balance. Use these rewards to restore your savings account.
Consider Professional Assistance
Sometimes, getting your finances in order by yourself is difficult and burdensome. Look to your accountant or financial planner to help you get started. Making plans with a pro can give you the confidence you need to keep it up.
Restoring your finances after a major spend is easier when you follow these tips.