Managing debt can be a very stressful experience, especially if monthly expenses exceed monthly income. The burden of figuring things out can be overwhelming for many people, and there are legitimate resources available to help guide you through the process, if necessary.
A good credit score is important to have. It is required for mortgages, auto loans, rental agreements, some job opportunities, insurance rates, and more!
When looking for resources to guide you on your journey to get control of and manage debt, it is important to make sure you are utilizing reputable resources that can be trusted to give you truthful and accurate information. I previously worked in the financial services industry, and saw many people of all ages and income brackets struggling to control their debt vs. the debt controlling them.
I often referred clients to review the articles and information available online to help get them started. What I HAVE used and referred others to use is the multitude of articles available at no cost on their website. There is some really valuable and helpful information available there.
I also know many people that have taken Dave Ramsey courses or read some of his books. Some find his methods, others overwhelming. It’s really a matter of personal preference, and there isn’t a one size fits all solution. I encourage you to check out his website at DaveRamsey.com and browse the articles available there to see if some of his advice and tips on managing debt will work for your unique set of circumstances. Some people are big fans of the “snowball” method of paying off their debt, while for others.
Find free or inexpensive ways to reward yourself for reaching your financial goals and milestones:
Enjoy a free movie or concert at a local park, and pack a picnic for the whole family.
Spend a day volunteering with a pet or homeless shelter.
Find out when museums or galleries offer free or reduced admission.
Visit the library and check out books or movies.
Look online or in local newspapers for the Community Calendar for fun things to do!
Try making a new recipe from scratch – it’ll likely be inexpensive and hopefully delicious!
Visit a friend, family member, or nursing home.
There are also services available that can help consumers for a fee. It’s been my personal experience in helping clients that often the work these services do for you could actually be done by you. However, the reality is that sometimes the process of getting debt managed and under control is just too stressful or overwhelming for people to complete on their own. In these instances, the services offered are a huge benefit and well worth the expense to those people. There is no shame in paying someone to help you through a stressful or overwhelming situation. The important factor to focus on is that you are taking proactive and positive steps towards improving your financial situation.
These are the top 5 ways that can help you to manage your debt
- Know exactly who you owe money to, how much the monthly payment is, and when it is due.
- Help establish a useable monthly budget, and establish routines to ensure payments are made on time, every time.
- Establish an emergency fund and savings routine, to establish financial security.
- Identify creative ways to decrease your monthly spending, and other ways to reduce the amount of your debt.
- Identify creative ways to increase your monthly income, and other ways to raise money to put towards your debt.
Another great resource to utilize when looking for debt management advice is the National Foundation for Credit Counseling (NFCC). This is a non-profit organization that has a website that offers articles on credit and debit counseling, student loan counseling, bankruptcy counseling, debt management plans, housing counseling, credit report reviews, reverse mortgage counseling, and financial tools & education. You could gather much of this information on your own, but may not fully understand all of it. This non-profit can set you up with a Certified Credit Counselor to walk you through the information, explain what it means, and give specific advice on your personal situation and circumstances.
Monitoring your credit report regularly can help you maintain momentum towards your financial goals. Keep visual reminders of WHY you are working so hard to get your debt managed and financial security secured. Don’t give up!
Once you’ve taken the steps towards establishing a budget and getting your debt managed, you’ll also want to follow up regularly and make sure that your credit report is reflecting the improvements you’re making. Changes don’t happen overnight, it will take time and persistence for the results to appear on your credit report. Getting in the habit of monitoring your credit report on a regular basis is critical. Everyone can request a copy of their credit report for free (no credit card required), from each of the three credit bureaus annually.
My recommendation has always been to request a report once every four months from one of the three agencies. For example, in January get a copy of the report from Equifax. In May, request a copy of the report from TransUnion. In September, request a copy of the report from Experian. Requesting the reports in this manner will allow you to monitor your official credit report throughout the year, to ensure any errors are addressed and corrected in a timely manner, and all information is up to date. Each site will have instructions on how you can correct any errors and allow you to request an additional report at no cost once the corrections have been made.