Here is my recommendation to solve debt

People it is very important you search for professional help, remember that getting in debt is really easy, but getting out of can be complicated if you don´t have the right tools. My recommendation is that you always seek professional assistance when it comes to paying your debts, remember that professionals can even get you great deals with payment options.

Reduce your debt

Many of us have different kinds of debt and in one point of our lives is difficult not to have debt, as debt increases in our household we are also in need to find out how to reduce our overall household debt. But be sure that acquiring debt is a 100 times easier than finding the way to reduce it, this requires a lot of work, dedication and keeping a clear mind, especially if you don´t stick to your budget month after month.

If you really want to control your debt and reduce it you can, and there is no better feeling than being debt free, here I will share some tips with you that will definitely help you reduce your debt and get closer to your goal of being debt free. You might think all this is logical or that you already know it… but do you really apply them on your daily life?

Cut backs

Cutting back does not mean punishing yourself or your family, it means you stop spending on things that aren´t really a priority and you choose products that are less expensive and you find ways to save while still providing to you and your loved ones as well as keeping your lifestyle (of course without the “extras” you might be used to), if you do this all month long you will star paying your debts quicker. Remember that being aware of how and when you spend your money is very important, not to mention on what you spend it. Sometimes we don´t pay attention on things we are used to have such as electricity, but you need to be aware on how much you are spending and how you can reduce your bill just by simply turning lights off and unplugging some devices, by reducing regular expenses you will save a little more and you will be able to use that money to pay your debts.

You need to be completely aware of how you spend your money, remember that a dollar spent here and there can turn in to hundreds by the end of the month, if you are aware of how, when and in what you spend you will be able to really get your cut backs going trough out the month. 

Stick to your budget

Ok, so first thing first, to me this is one of the most important aspects of being debt free and economically independent.

The budget is a golden rule when it comes to finance, from the biggest international corporation to the household, budgeting your income is a must! Maybe you don’t know how to make a budget, trust me it’s simply but it does require commitment from your part, as well as practice. Start by listing all your fix monthly spending with their due dates, then include gas and groceries (if this vary from month to month, it will be ideal that they are controlled each month). After you list all your fixed bills take a look at your monthly salary and see how much money you have to pay your debts, remember to take control and avoid spending extra cash on things you don´t really need, this cash can be used to pay debts. Stick to your budget, manage yourself when it comes to spending and you will be in a clear path to reducing paying your debts.

Control and limit the way you use  your Credit cards

Amongst us investors and savers there is a golden rule “If you can´t pay it with cash, don´t buy it” This does not means do not use your credit card, but if you use it you need to be certain that you will be able to pay it in full the next time your credit card bill comes, avoid taking “offers” where that give you a few months to pay your balance or buy with credit having the idea to only pay the minimum, because guess what, when you do this you just acquire a new debt! If you have a credit card pay it in full each month, and if you can pay it with some days in advance, this is very important so I´ll say it again: PAY YOUR CREDIT CARD IN FULL EVERYMONTH if you cannot do this, then do not use your credit card.

Get rid of your “collection” of credit cards

How many credit cards do you own? If you are really committed to reduce debt getting rid of all those cards will definitely help, you cannot use what you don´t have, and most likely do not need.

I know this can be difficult and you can maybe find one good reason to keep your credit cards, but keep the ONE you need and get rid of the ones that are completely unnecessary, do not keep your cards based on excuses like “I might need them someday”. Keep one or two credit cards, the ones with the lowest interest rates and the ones that won´t charge you hidden fees. Remember the golden rule, if you really cannot buy something with cash then you are out of your budget and you probably don´t need it.

Don´t waste time and money, pay off your debts

Never, never, never stop paying your debts in order to buy something you don´t need. If you are in debt you are in need to get them pay as soon as possible, take a look at what debts you have and choose the smallest one and start with that one, sometimes we ignore the small one until it becomes the “new big one”. Always pay within your budget and avoid taking out another loan to pay an old debt. Paying your debts always bring a feeling of satisfaction and will give you the confidence that you really can pay your debts, don´t get stuck in a negative way, trust yourself, if you are organized with your finances you will pay your debts in no time. Pay them one by one, remember this is a process, sometimes feeling overwhelmed is natural, but don´t let that feeling guide your decisions, you need to have a calm mind when it comes to finances.

Try debt consolidation

Debt consolidation is a nice option when it comes to reducing your debt, there are many debt consolidation companies will make all the necessary arrangements for you in order to make payments in a more efficient way, but be sure to look for the right company, not all debt consolidation companies will arrange a small monthly payment, search for the right one for you and they will arrange a way to help you pay your debts.

Look for financial counseling

Experts knows best… contact a financial counselor to help you reduce your debt, if you are not an expert in finance you might be making some mistakes that can easily be undone, a financial counselor will show you how to manage your money in a more efficient way and design a good budget.

4 Practical Ways To Deal With Credit Card Debt

As a consumer of course I have a credit card, at one point in my life I even had 5!! It was becoming real issue being in so much debt,  I really didn´t know how to deal with my situation.

You've probably heard that consumer debt is at an all-time high, meanwhile your savings rate is lower than ever before. You realize that the commodity and ease of online shopping is just a click of a button and Its almost impossible to shop online if you don´t have a credit cards, this just adds to the national consumer debt. You are well aware that running a balance on your credit card and paying the interest rates that come with it is one of our most time and effort consuming tasks, becoming itself a real financial problem. But the offers of new “low interest” credit cards just keep filling not only your mailbox but your inbox as well.

Still, credit cards are almost a basic necessity nowadays in our life, and it is extremely important to understand how to use them wisely. It is unpractical not to have a credit card (not that you cannot live without one), but it is more than prudent to limit the number of cards you have (as I mentioned at one point I ended up with 5!!), and the best thing you can do is to pay all balances in full every month so that you don´t get stuck paying interests.

But we are not infallible; from time to time we have ended with credit card debt, so here are some ways to keep your credit in check:

1. Don´t be fooled by the “promotions” , You can easily take advantage of frequent-flier miles programs , but always remember that nothing is free and that interest payments on a high balance can quickly turn “free miles” into miles of debt. Let’s suppose that your card gives you a dollar per mile, carrying a debt of 25,000 may get you a plane ticket and a free trip, but it will also saddle you with $4,500 in yearly payments of interests, that´s assuming an 18% annual rate.

2. Always keep your eyes open and look closely at credit card offers before you sing. It´s obvious that most interest rates will be in effect for only a few months. But there may be (and most likely will be) other catches as well like other fees when making a late payment, even if it arrives only a day after you were due to make it. Also, low initial rates sometimes may only apply to transferred balances, and you may get charged a fee for making the transfer. Always check to see whether there is an annual fee (like membership), or charges for exceeding your credit amount or for closing your account.

3. Avoid amazing grace period, if they will you outstanding grace periods were you won´t have to pay a dime, when this periods end you might have to pay up accumulated dimes that quickly turn into dollars. What you need to look for is a provision that says you will never be charged interest or fees as long as you pay your bill in full by the due date. But be aware that some cards have no grace period, calculating interest from the moment you make a purchase, while others give you only a limited time or grace period after making a charge before interest start accumulating.

4. Always, and I do mean ALWAYS! Cancel cards you no longer use or need. If you forget or don´t, they'll show up on credit reports, and that maybe a problem if say you are applying for a home mortgage since banks or loaners may be reluctant to make a loan to someone who has a cumulative credit card limit of $50,000, $100,000, or even more.