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When Should You Consider a Debt Relief Program?

using debt consolidation

Households in the US carry an average of $7,400  in consumer debt. Whether indebtedness comes from having to use credit after loss of a job, a large medical bill, or from years of overspending, there comes a time when bills outpace income and something has to give. No one sets out to have crushing debt payments, but unfortunately that’s how many people end up. Sometimes those in debt need outside help to manage their situation, but when should you consider a debt relief programs? Can I Pay Off Debt on My Own? Before consulting a debt relief agency, determine if it’s possible to pay off balances on your own. Is there a way to cut expenses or increase income enough to make payments more manageable? Credit card companies may work with you by lowering interest rates or it may be possible to transfer high interest balances to zero interest promotions. Remember that promotional offers may charge a fee for balance transfers and there is usually a limited time period before interest rates go up. If you can’t pay off the balances in the allotted amount of time, or if your credit is not good enough to get interest rate reductions, it ...

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Being at Peace With Debt

paying off debt without stress

With of Americans carrying almost 12 trillion dollars of debt, it seems inevitable that we’ll all owe someone money at some point. I was reading an article about student loans recently and it listed a concept that many in the personal finance community don’t understand or support; coming to peace with debt. At first glance, I was ready to write the whole article off as one of those advice pieces that are about as helpful as payday loans or 18 months with no interest until I read further and decided that maybe being at peace with debt isn’t such a bad idea after all. Debt Can Control Your Life It’s very easy to let debt control your life. One example is after overextending yourself to the point where minimum payments are forcing you to live paycheck to paycheck. In this situation, the end of the money happens before the end of the month. You’re forced to dig further into debt keep the household running. The other example is when you have a sizable debt, something like a mortgage or student loan, and you can’t get over the fact that you’ll owe money for years. Even though these are considered “good ...

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Is It Better To Invest or Be Debt Free?

paying off debt quickly

A big reason many people put off investing is debt. It doesn’t really make sense to ramp up investments while paying 21 percent interest to credit card companies, but what about low interest debt? Obviously the answer depends on many variables including income, how much debt you owe, and if you are investing for short or long term goals. We currently have lots of mortgage debt, mostly from investment properties, that we’d like to see paid off quickly. However, we don’t want to miss out on investment gains and compound interest either. Is is better to invest or be debt free? Completely Debt Free In Six Years! Assuming we maintain our current level of income and expenses, if we were to stop investing in our 401k’s, IRA’s, and taxable brokerage accounts and put all the money toward paying down mortgage debt, our primary home could be paid off in about three years. The commercial building we own will be paid off in a little over four years. At that point, we could throw everything toward the other rental house and four plex, paying those off in another two or three years. If we went for that strategy, we would own ...

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Banish Debt Like A Boss At Frugal Woods

climing the mountain of debt

Are you struggling with debt? Do you lie awake at night worrying about making monthly payments? Do you feel like you’ll owe Visa until the day you die? Don’t worry, you’re not alone. Today I’m excited to be guest posting at Frugal Woods. Mr. and Mrs. FW are the rare exception in today’s society. They have never had debt troubles! Since I have had my fair share of debt experience, I’m helping with their series in Demystifying Personal Finance. I’ll be talking about how to mentally prepare to pay off debt and steps people should take to get banish debt once and for all. I hope you all will check out Banish Debt Like a Boss at Frugal Woods.

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How Anyone Can Get Out Of Debt

paying off debt once and for all

On Monday, we talked about how people, even smart ones, can get into debt. Getting into debt is easy and sometimes even fun, but there is always a price to pay. I don’t know about you, but I love having choices. Debt robs any choice besides having to make a payment. If you really want to start living the life you were meant to have, it’s time to get out of debt once and for all. The good news is that by following some simple steps, anyone can get out of debt.  Accept Responsibility For Your Debt Now when I say simple, that doesn’t always equate to easy. It’s simple to lose weight by burning more calories than you consume, but how many people struggle with that one? I believe the first step in getting out of debt is to let go of the reasons that landed you here so that you can move forward. It doesn’t matter if your debt came from bad decisions, taking out too many student loans, not getting or keeping the job you wanted, or even from having medical bills. Once the balance is on your credit report, it’s all debt and your responsibility. Debt ...

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