Debt Consolidation or Debt Management

Choosing how you will get out of debt is the first step to taking back your financial life. There are two major types of programs that you may be able to consider if you are looking to stay away from bankruptcy. Debt consolidation and debt management are programs that may sound similar, but are in actuality very different. Here is a great video explaining answering the question of “What Is Debt Consolidation?” and here are some of the major differences that you can expect.

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Awesome Ideas For Getting Out Of Debt This Year

Are you struggling to meet your financial obligations? Would you like to get out of debt as soon as possible? Then you might have to use lots of different techniques to keep your lenders at bay. The advice in this article should help to make sure your finances are in order soon. You just have to take some of our suggestions and work out which will offer the best outcomes given your personal situation. Of course, you are not limited to the ideas on this page, and you should always research all the options before making your decision. Getting out of debt could take a heavy load from your shoulders, and it could also mean you have more cash to spend on your family.

Ways to reduce your debt:

  • Making sure the payment you make are higher than the minimum threshold should help to reduce your debt more quickly. The longer you take the pay the money back, the more interest you will incur. You should always try to make the highest payments possible if you want to limit the amount of time you have to deal with the lender.
  • Missing payments will mean you incur extra charges on top of your debt. It could also damage your credit rating. So, you need to ensure you always send the money with time to spare. Some lenders will charge anything from £10 to £100 for a late payment. If you think you aren’t going to have the money, it might be sensible to consider pay day loans. While they do not solve the problem, they could help when you are at risk of missing your deadline. So long as you know the money will be in your account soon, you can simply pay the lender back when the funds are available.
  • Consolidating your debt is the best option for getting it sorted quickly if you owe money to multiple lenders. There are lots of companies out there that specialise in grouping all your debt together into one easy monthly payment. You will end up paying a little more in the end, but it will make your life easier. Best of all? The consolidation company will deal with all your creditors. Once a deal is in place, the lenders are no longer allowed to call you or send threatening letters.
  • Sometimes it’s best to head to your bank and look at the possibility of getting a personal loan. That is the case if you owe money to lenders that is amassing lots of interest. Your bank offers the best rates of any lender, and so you could reduce the amount of pay by taking out a loan. Use that loan to pay all your debts, and then you simply have to keep up the monthly payments with your banking provider. It’s like a consolidation deal except you don’t have to pay such a substantial fee.


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Presuming you want to pay your debts off as quickly as possible, the chances are you will need to cut back on spending. We’ve come up with some ideas that should help you to do that. Take a quick read, and hopefully everything will become clear.

Ways to cut back on spending:

  • Doing your weekly food shop at budget stores could mean you save up to 50% on the items you purchase. While most of us like to eat good food, you won’t tell the difference between products from cheaper stores. Aldi is one of the most popular ones in the UK at the moment, but there are plenty of others around too. Staying away from the big names should mean you can make huge savings.
  • Repairing broken items in your home will mean you don’t have to spend as much on getting replacements. If you’re unlucky enough for your TV to stop working, there is no need to shell out hundreds of pounds on a new model. Just search online to find repair businesses in your local area. The same goes for everything else. You can even repair old clothes if you learn how to sew.
  • Making sure that all plug sockets are switched off in your home when you are not using them could save you around £200 per year. Doing the same thing with your lights and heating could increase that amount considerably. If you struggle to make sure everything is switched off, perhaps it would make sense to invest in some timers? Also, people who pay for their electricity via a meter should think about switching to a monthly plan. Those devices are always more expensive.
  • Reducing the amount of time you spend behind the wheel could mean you save a lot of cash on fuel costs. There is no reason to use your car to visit the local shops when they are less than one mile away. You should simply walk or use a bike. Not only will that mean you have more money to give to your lenders, but it will also help to get your body in shape. We spend too much time vegetating in front of the television these days. Cycling to your local shops will help to keep you active.

Now you’ve read our ideas about getting out of debt this year, we hope you will be in the best position to get things sorted. By following our money-saving suggestions, you could have a lot more cash to give to the companies sending those threatening letters. Just remember that consolidating your debt will mean you no longer have to communicate with them. Some people find that is the best option as it reduces stress.

However you decide to progress this year, you just need to keep working towards your goal. Once your debt has been paid, you should refrain from borrowing again. There is nothing wrong with waiting a while and saving to get the items you need. That was how your grandparents did it, and they seemed happy, right? We all need to steer clear of this new lending culture that has been created during the last couple of decades.


6 Surprising Ideas To Help You Get Rid Of Your Debt

When you have money worryings hanging over your head, it can feel as though you have a massive black cloud following you. You need cash to do (almost) everything in this world, and that can mean that your financial restraints are a real burden. You might think that you can ignore your debt issues, but doing so will only make the situation worse than it is now. Instead, you need to work towards being debt-free in the future. Set yourself a target and work for it so that you know this hardship will end soon. Here are some surprising ideas that might help you get rid of your debts.

  1. Make extra cash at home

If you don’t have enough money to start paying off your debts, you need to find a way to increase your income. There are loads of ways in which you can make some extra cash at home. When you finish your day job, you might feel as though you are too sleepy to do any more work than you have done. That feeling is misleading. I bet you still have energy to see people and go out, don’t you?


Imagery via Flickr

  1. Get rid of shopaholic friends

If your friends tend to spend loads and loads of cash, this is a massive problem for you. When you go out with people who spend a lot of money, you will feel social pressures to do the same. Some people have the money to spend, and so don’t need to worry about budgeting. If your friends are always encouraging you to spend your cash, you need to ditch them.

  1. Take up free activities

Saving money does not mean that you need to stop having fun. You can still get out there and see people without breaking the bank every time you do so. You should look for some free activity groups so that you can meet people and enjoy your spare time without it costing you anything. You can find clubs online to join. Choose a club that suits your interests so that you can meet like-minded people.

  1. File a claim

What got you into debt in the first place? For example, if you had an injury and had to pay for medical fees, did that cripple your finances? If someone else causes your financial woes, you need to talk to a compensation solicitor as soon as possible. Much of the time, people think that they can’t file a claim against someone else. In fact, if someone’s mistake has left you with debts, they need to clean up the mess.

  1. Create a direct debit payment

If you need to pay off a particular amount of money every month, you should make sure that the transaction is automatic. Set up a direct debit to pay the fee so that you don’t have to think about it at all. If you have to make the payment each time, you will find reasons to avoid doing so. If the amount comes out without you doing a thing, though, there is no way you can stop it.

  1. Sell your old gadgets

These days, people seem to have more gadgets than they can use on a daily basis. From tablets to games consoles, there is a massive range of things you might have in your home. If you want to make some quick cash, you should get rid of the things that you no longer use. Look at each gadget in your home and consider when you last used it. If you can’t remember when you used a particular item, it means you won’t miss it when you sell it. You can sell these items for hundreds at a time so why wait?

Five Scary Realities Of Earning A Bad Credit Rating

Money is a little tight this month and there are more bills on the kitchen counter than there are dollars in the bank to honour them. Something has to give. This creditor won’t mind too much if this month’s payment is missed and caught up later, right? Wrong. The fact is many modern creditors rely heavily on invoices being paid when they are due to ensure a healthy cash flow to pay their own bills. They usually have systems in place that automatically flag a missed payment, and the end result is a bad credit rating that can often haunt the even temporary defaulter for years to come. Continue reading

10 Habits That Made Me a Millionaire at 27

one-million-dollars[1][Happy Monday guys 🙂 Thought we’d start it off right this week with a pretty kick-ass article from my old friend Anton. Last time he shared with us his money lessons from growing up in the former USSR, and now – a year later – he’s officially a millionaire and shares how he achieved this. How many of these habits are you currently doing?]

Earlier this year, shortly before my 27th birthday, I became a millionaire. It wasn’t a sudden thing and I pretty much expected it, but it felt absolutely awesome nevertheless. Checking your Mint account and seeing a cool $1 million net worth is a great way to start a morning!

What still bugs me a little, however, is the way people perceive millionaires and especially what they think about how people like me became financially successful. They always seem to be looking for some secret formula or hot stock tip that will make them rich overnight. When I tell them that I made my money through a lot of hard work, self-discipline and sacrifices they usually seem disappointed.

I can’t really think of a single thing I did that was the magic key to my success. Instead, it was a combination of daily tasks, habits and principles that helped me grow my net worth year after year.

I wanted to share 10 of these habits that I think were especially important:

1. Setting Detailed and Actionable Goals

I realize that talking about goals is really cliché. Pretty much every single “how to be successful” book I’ve ever read talked about goals at one point or another.

Well you know what? I am a testament that goals really do work! I would consider myself a goalaholic because at any given time I have over 180 or so that I’m actively working on. I started setting them just for my finances, but now do it for all areas in life.

My goals give me motivation, keep me on track and help me track my progress. I look at them every day and they help me make decisions both big and small. And most importantly – they give me a vision for the future.

2. Religiously Tracking My Net Worth

I consider net worth to be the ultimate metric of financial success. I’m really not that impressed by how much people make, but I will listen to somebody who has a high net worth.

I’ve been tracking mine since I was a teenager. I did everything I could to increase it by double digit percentages every single year and for the most part, I’ve been successful in doing so.

If you’ve never calculated you net worth, it may be a huge reality check. I’ve met tons of people who have 6-figure salaries and a net worth of less than $100,000.

3. Having the Discipline to Save 60% of My Income

You don’t necessarily need a high paying job to grow your wealth (although it sure helps!). What you do need, however, is the discipline to not spend all of the money you make. The greater your savings rate, the faster you will grow your wealth and the sooner you will be able to retire.

My actual goal is to save at least 50% of my income each month. I tend to exceed this and come closer to 60% most of the time. It’s not easy if you are used to spending a lot of money, but if you work up to it over time, it’s doable for just about anyone.

Other than just pure discipline, there are two things that especially help me save this much:

4. Avoiding Expensive Things

There is nothing wrong with shopping for the best wireless service company or trying to save money on your grocery bill. But you know what I’ve noticed? It’s the big things that tend to kill most people.

I have a friend at work who is an expert at our local gas prices. I don’t know where he gets his info, but he always seems to know where the cheapest gas is. Sounds like he is a frugal type, right? Well, he then turns around and spends thousands of dollars on new gold clubs and memberships! What sense does that make?

I’ve always tried to avoid expensive things. I don’t play golf, I don’t go to fancy restaurants, I don’t buy expensive clothes and I don’t stay at 5-star resorts twice a year. I live a simple life and devote more time to people instead of things. Try it, you might just like it 🙂

5. Always Paying Myself First

Believe it or not, I’m not a fan of monthly budgets at all. I haven’t followed a strict budget for years.

It’s not that I don’t think they are sexy, but I’ve found them to be too inflexible. It’s all good when your expenses stay exactly the same month after month, but that rarely happens. So you end up reworking your budget from month to month, going over your limits and feeling like you failed.

Instead, I pay myself first. Paying yourself first basically sets the priority of what you do with your money each month:

  1. You get paid
  2. You transfer money to your savings or investment accounts
  3. You pay your bills
  4. You only spend what is left

This system has helped me follow through with my savings goals because I take care of them first. My spending, on the other had, comes last and by that time there isn’t much money left to spend anyway. Plus I have full flexibility as far as what to spend it on, which works for me.

6. Completely Avoiding Consumer Debt

I can honestly say that I’ve never got charged credit card interest, I’ve never had an auto loan, a furniture loan, an electronics loan, a payday loan or any other type of consumer debt. I just don’t buy anything on credit. I either have the money in my bank account to pay cash, or I don’t buy it.

It’s that simple.

I do in fact use my credit cards to take advantage of their reward programs and to build my credit, but I pay off my balance in full at the end of each week so I never get charged interest.

This takes a good amount of discipline (it’s always easier to spend money you don’t actually have!), but avoiding consumer debt has saved me a ton of money on interest and has helped me live below my means.

I should make a quick note here about mortgages. I do in fact have two of them on my two rental properties. I’m a firm believer that you can get a much higher return on your investments in real estateif you are diligent in doing your research. And that’s a big if, mind you. It’s very easy to get yourself in trouble with this much debt, so don’t take a mortgage lightly by any means.

7. Actually Having an Emergency Fund

This is another topic that you always hear about, but I wonder how many people actually have an emergency fund?!

Putting mine together was one of my first financial goals. And I’ve actually had to use it twice. I won’t go into the details of what happened, but let’s just say I was very happy that I had the money I needed right there and then and didn’t have to use my credit card.

I keep my emergency fund in a high yield savings account. I hear about people using CD ladders or even investing theirs, but I think that completely defeats its purpose. It should be there 24/7, just a click away and you definitely don’t want it declining in value.

8. Saving Ahead for Large Expenses

So you know how I said that I’ve never had any consumer debt? Well what helped me avoid it is saving ahead for large expenses and purchases.

I keep a list of everything I plan to buy in the next few years that will be more than what my monthly cash flow can handle. This includes plane tickets, presents, maintenance on my car, moving expenses and so forth.

Depending on how long I have until I need the money, I either save for these in a savings account, CD or short-term investments like low-risk bond ETFs.

9. Investing Money No Matter What Happens

I’ve found that when building your wealth, consistency is key. I’ve been contributing to my retirement and brokerage accounts and my real estate fund (which I use for future property purchases) without fail for nearly 10 years.

I’ve invested money no matter what was going on in my life. It didn’t matter if I was strapped for cash – I put my investment contributions above everything else. When I had some extra money, it all went toward my investments.

I’ve also invested no matter what happens with the economy, the stock or the real estate market. Whether it was up or down, I was investing. Which takes me to my last point:

10. Investing When Others Panic

One of my idols, Warren Buffett once said:

“Be fearful when others are greedy and greedy when others are fearful.”

I’ll admit that I had to overcome some fears, but I’ve piled money into the stock market and real estate when everybody else was proclaiming it was the end of the world around 2008-2009.

I was fairly new to investing back then, but I’m super glad I made that choice. I’ve seen tremendous gains both in my stock and real estate portfolio in the years to come after that. I hope that the next time we have a major downturn I can do the same!

As you can see, there is nothing complicated or new about my habits. They are very simple to understand, but some do require a good amount of self-discipline to follow through with.

I think that if you set your mind to it, you can definitely accomplish the same, or even more, than me. It probably won’t be easy and it may take some time, but you too can become a millionaire.

How many of these habits are you currently doing?

– Anton

P.S. If you want to check out what my net worth looks like right now, here is my latest update.


This article is provided by Melissa