Managing your debt problems

Last couple of months, I ran a series of articles pertaining unethical collection practices. I received several emails from consumers detailing how they were allegedly "harassed" by these collection agencies. Personally, while I sympathize with them, I cannot help but be vocal with the simple fact that if they were just careful in managing their debts in the first place, it will not reach to the point that they will be endorsed to a third party collection agency.

So today, I would like to share with you some proven tips on how to manage your debt problems. As I always believe that by understanding these simple guidelines on how to manage properly your debts and having a firm resolve of actually doing it, is the first step in achieving debt-free living.

According to Iris Taylor and Shana Moore, Certified Credit Counselor, the following are good tips in managing your debt problems or getting out of debt.

* Sit down with the family and write financial goals together. That way, everybody, including the kids/ family members, gets on board. It's discouraging if one person is resolved to pay down debt while everybody else constantly clamors to dine out, watch movies or buy toys.

* Focus on paying high interest accounts. Your high-interest accounts go down slower.

* Stop using the cash-advance feature of your credit card. The interest rate is always higher, and you wind up paying a lot more interest and taking longer to repay your debt.

* Stop thinking of your credit card as a cash cow. It's not. It's a loan; you're borrowing money.

* Always remember that, if you mess up with one creditor, you mess up with all.

* Call your creditor if you're in over your head. If there is no way to make even the minimum payments to your creditors after reducing expenses, call your creditors and work out long-term repayment plans with them.

* Get a reputable debt-management firm to plan your repayment/ payment of your bills for you. For many consumers, that's the only alternative, because they don't have the personal financial discipline or savvy or knowledge to do it on their own.

* And most importantly, stop giving away your money. Pay cash whenever possible so you don't waste money paying interest. If you can't pay cash, shop with your lowest interest-rate card. Pay off outstanding balances to avoid finance charges, penalty and interests.

Lastly, always remember that everything begins from small things. Start with paying your bills on time. If possible, get into the habit of making payments as soon as the bill comes in or better yet before. Don't wait for the due date. Being debt free is not having lots of money but by having good credit discipline.

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