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Important Information to Keep in Mind: Every business and consumer debt consolidation service or related program offering debt relief is different. Please make sure that you always read through a provider's website and examine any additional terms and conditions before you get started. Be sure to ask questions about anything that is unclear. Finally, don't agree to sign up with a company until you fully understand how you are obligating yourself and what effect it may have on your future ability to secure credit, such as getting credit cards and home loans. That is because credit counseling, debt settlement and bankruptcy can be very effective in reducing debt and helping you with your debt problems. Unfortunately, these solutions may also adversely affect your credit history. Educate yourself about all of your available options and then make an informed decision that is best for your personal finances.

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Debt Consolidation : Take Control to Deal with Debt Problems

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Debt Problems? Deal with the Causes Before They get out of Control.

For many Americans, a personal debt crisis is imminent, and for many, tightening belts and adopting a stricter monthly budget won't be enough to alleviate the current financial strain on their ability to pay bills and save money. There is a great need for more decisive and effective action; a real debt solution to ease some of the pressure exerted by high monthly payments.

Pinching pennies is not as easy to as used to be. Simply tightening the family purse strings and weathering the economic downturn is a lot easier said than done. These days, Americans are feeling the impact of cost increases that pervade every aspect of their lifestyles, and without comparable increases in their personal income to offset these price increases. Take a minute to note how much you are spending for just the simple things like your morning cup of coffee, your daily commute to work, going out to lunch with co-workers, or the gallon of milk that you picked up at the convenience store on your way home. Now, calculate how much you are spending on these items each month. Our normal daily spending habits are bearing the brunt of price increases, and most consumers don't realize just how much until they actually put the numbers down on paper.

Dealing with price hikes on day to day consumer goods and services can really strain the average family budget, but people are also facing other added pressures. We have seen steep declines in retail sales, a depressed real estate market and, as previously mentioned, difficulties with earning enough income due to a weak job market and high unemployment rate. The cumulative effect of these economic issues directly impacts consumer finances, with the family budget getting squeezed on all sides.

For many American's, a personal debt crisis is imminent, and adopting a stricter budget may not be enough to stem the tide of late payment fees tacked onto an already insurmountable amount of outstanding debt which is often being paid at very high interest rates. Individuals finding themselves in this situation may need to take a serious look into debt consolidation and other relief programs as a way to regain control of their financial situations. If you are among this group, using one of these companies to pay down or eliminate debt may indeed be the best fit. However, for many other people it is still possible to handle the situation personally. They can keep spending under control, gradually pay off their bills, and yet, still be able to enjoy life during the current economic downturn. Often, all that is required is determination and some common sense.

Here are a few examples of simple (self-controlled) budget management. Consider a few of the following items that were already mentioned above:

  • I need my coffee to get going in the morning. All coffees may not be created equal, but caffeine is still caffeine.

    Something to Think About: Set the timer on your coffee maker before you go to bed in the evening. Make your coffee the way you like it, and it will be ready before you head out the door in the morning. You can save $3 or more every time you brew at home. 

    In the Very Least: Consider stopping by one of the discount fast food chains that is open for breakfast. It is cheaper, and in some cases, has even won taste tests over specialty chains.

    Common Sense: Regardless of your individual opinion on taste, making this sacrifice on behalf of your taste buds is better than the damage to your credit history caused by making a late payment on your bills.

  • I love my car. Do you love making the monthly loan payments?

    Something to Think About: Keep the car parked at home and take public transportation or find a carpool to join in order to save on your commuting costs. Cars are great to own, fun to drive, and extremely convenient. However, they are also one of the ways that consumers often get themselves into serious issues with debt. That vehicle may look great on the lot, and even better in your parking spot, but imagine what would happen if you lost your job and were still saddled with a high monthly payment that you could no longer afford. What if you were still employed, but forced to take a cut in pay? Now, add the cost of insurance and parking fees (if you work in the city). Suddenly, that new car that you put no money down on, is financed "upside down" (owing more than the car is worth). Ouch!

    In the Very Least: Never buy a new car if you aren't prepared to put a large percentage down, and definitely not if you owe more on your current car than it is worth. Financing a new car with negative equity (or upside down) is nothing but an invitation for trouble. As mentioned above, what happens if you lose your job or your pay is cut? Cars lose their value very quickly and should never be financed over the purchase price. So, if you are put into a position where you have to give up the car completely, or simply downgrade, you can do so without getting a repossession action placed on your credit report. 

    Common Sense: Paying for a car to drive to work, and working to pay for your car may seem like the same sentence worded two different ways. However, if you buy a vehicle that is too expensive for your budget, or one that you don't need, unfortunately you may realize the difference at a time when you can afford it the least.

  • The list goes on and on. And, so does your potential for savings.

    Plan ahead and be sure to always be sure to buy your milk at the grocery store where it is cheaper. Do even more planning and stock up when you make that grocery run. Before heading off to bed, when you are setting the timer on your coffee maker, take a few extra minutes and make your own lunch for work the next day. Getting out of the workplace with co-workers for lunch is a great way to relieve stress and make the day go by a little faster. It is important. Regardless, taking your lunch just a few days a week can have a dramatic effect on your overall budget. Save two dollars here; save a dollar there. At the end of the month, it can really add up.

Buying something to make life more enjoyable is pointless if you have to spend all of your time working to pay for it.

The little things can help, and they certainly do add up rather quickly. However, the two most important factors in causing a personal debt problem still center around a consumer's failure to:

  1. Be proactive. Save money for unexpected expenses and emergencies.

    If you have been putting money into an emergency fund / savings account at your local bank, in most cases, you won't need to resort to using more debt as a solution to your problems. Taking on more debt is not the solution. It is the problem.

  2. Be realistic. Determine the difference between wants and needs.

    This process begins with you first being honest with yourself. If you really don't need it, don't buy it. And, never buy it on a credit card or take out a loan with the plan that you will be able to pay it off just because you believe you will be making more money in the future. Predicting the future is not that easy. This is pretty much the point being made above in reference to buying a new car. Buying something to make life more enjoyable is pointless if you have to spend all of your time working to pay for it.

Did you know that you can search this directory for debt consolidation companies and related services providing help on a state and city level? Simply visit the state debt company directory to get started!

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