Becoming debt-free has become very important now more than ever. The economic downturn has hit everyone in the country and the rest of the world. Interest rates are skyrocketing and loans are becoming a pain to get. If you get caught in a debt cycle, chances are you’ll end up spiraling down to even more financial problems.
Don’t lose sleep thinking about your finances just yet. There is still something you can do to manage your funds and get your finances back into shape.
There are only two ways you can go about this: bring in the assistance of a professional company or work your way out of this mess yourself. The decision is really up to you, but make sure your choice meets your needs.
Need a Hand with That? Managing Debt with the Experts
Before you commit to a company or program for debt management, remember that a good credit counselor should be able to help you create a sound budget instead of forcing you to enter a debt management program. Thorough background checks and researching is the key to finding a godsend company that will rescue you from financial troubles.
More importantly, you don’t want to be defrauded. You already have worrisome financial issues at hand. Look for accredited, licensed companies, but understand that accreditation is no guarantee that they’re as competent as they claim. You still need to snoop around and do background checks.
Find out how their programs work. Sometimes, these debt management companies use the terms debt management, debt negotiation, and debt consolidation interchangeably in the hope of confusing potential customers. Don’t be deceived by marketing corporate babble. Investigate about their programs some more, and look for customer testimonials and reviews to see what previous customers experienced.
How to Gain Freedom from Debt by Yourself
Why pay for professionals when you can manage your finances by yourself, right? Well, yes, that’s true. However, before you tackle your debts head on, remember that there are effective and not-so-effective ways to go about this. Read on for the more effective steps.
First off, make a list of all your debts and put the one with the highest interest rate at the very top. You want to pay these debts starting from the top of the list so you can pay the most expensive first. Your extra money should go to the bill at the very top. It will take some time before you can see results. Remember that with this method, becoming completely debt-free is a gradual process.
If you prefer quick results or if you’re the type who likes instant gratification, the method above will only frustrate you. Instead, make a list of your debts and sort them from smallest to largest without thinking about interest rates. Make minimum payments for every bill and use all your extra funds to pay the smallest debt. This way, you will pay off everything quickly and see results fast.
When Do You Need Help from Professionals?
Managing money yourself isn’t easy. Sometimes, you may be tempted to spend your cash on something else when you have dues to pay. If you find it hard to manage your funds or if you tend to forget to pay even if you have money, that’s when you may need the experts.