Debt Management & Reduction
- One of the main reasons that people fall into debt problems is because they live above their means. Take a close look at everything in your budget. Determine where you can cut costs. You might be able to refinance your home for a lower mortgage payment. Create and emergency fund in your budget. Usually about 10 percent of your income should be paid into your emergency fund until it is built up and able to cover six to 12 months of your expenses. This will help you prevent future debt problems.
- Evaluate your credit card and bank statements. Consolidate your banking to one location where you can do online banking. Doing things online can reduce costs and make payments automatic. If you can consolidate credit cards at a lower rate, do so. Or call the credit card companies to negotiate lower interest rates.
- If your debt is overwhelming you might need to seek the help of a professional credit counselor. There are many agencies that specialize in negotiating with creditors, consolidating payments and reducing interest rates. Credit counselors also will review your budget with you.