The 5 Secrets to Getting Out of Debt Fast
As they stare down at a teetering pile of bills, so many consumers wonder
how they racked up such a large debt. The answer boils down to simple
mathematics.
"On a basic, fundamental level, the problem is created by spending more
than you make," says Brad Stroh, co-CEO of the San Mateo, California-based
Freedom Financial Network, LLC, a company that specializes in debt
resolution services.
The reasons for doing so, he notes, are varied:
? Spending addictions
? Lack of budgeting (mistaking the amount of money coming in and going out)
? Loss of income (reduced hours, layoffs, forced to leave the workforce)
? Increased costs (health-related expenses, fuel and other basic living
expenses)
? A personal hardship (divorce, medical illness, loss of a loved one or
other major changes in a person's life)
You can, however, get out of debt-but it takes commitment. Here are 5
steps to accomplishing your goal.
1. Start Planning-and Saving
"The only way to guarantee solid financial footing is through proper
planning-and that's where most consumers go wrong," Stroh says. "Proper
planning means monthly budgeting of cash flow, combined with saving for
long-term security."
Stroh recommends saving at least 5% of your income to ensure long-term
financial security.
"Of course, this percent will vary by age group and the individual's
financial goals and objectives," he says. "Younger people can expect to
spend their early years saving less of their income, paying off student
loans and debts incurred during periods of lower income. Older individuals
should be planning for retirement and saving a larger share of income."
2. Seek Professional Help
If you are facing financial hardship, do not procrastinate when it comes
to seeking professional advice.
"People often wait too long," Stroh says. "If someone is living paycheck
to paycheck, is behind on any revolving financial obligations (including
credit cards), is using credit cards to pay for necessities, or is facing
collection, he should consider getting immediate advice from a
professional debt management firm or financial advisor."
3. Stop Spending
If you continue to spend money, despite your ever-growing debt, you likely
have a bona fide addiction that requires psychological intervention.
"Debt problems are frequently symptomatic of more fundamental personal
issues, such as reticence to address difficult financial problems," Stroh
says. "Spending addictions can have many causes, including lack of
personal confidence and fulfillment. Similar to many other addictions, a
spending addiction can fill a void in an individual's life-albeit with a
fleeting source of satisfaction. People with spending addictions
constantly strive for the 'high' that they receive from buying clothes,
cars and other goods. This leads to a long-term problem when they cannot
meet the consequent financial turmoil that comes when the bills arrive.
For anyone who may think he has a serious spending addiction, we advise
seeking professional counseling or therapy to resolve the fundamental
sources of this addiction."
4. Start Communicating
If you're like many consumers with outstanding debts, the last person you
think about speaking with is the creditor-the company you've been avoiding
at all costs.
"Not contacting your debt creditors to discuss and develop a plan for
paying, settling or reducing the principal amount and/or interest on the
debt" is one of the worst mistakes you can make, says financial expert
Ivan Gelfand, president and CEO of Pepper Pike, Ohio-based Ivan Gelfand,
Inc., and author of "Your Money, Your Future" (to be published in April).
He also recommends contacting relatives or friends for temporary
assistance in reducing debt and making payments, which will lower your
outstanding debts' interest rate.
5. Conquer Denial-Today!
Many consumers who recognize-and even accept the fact-that they have a
spending addiction refuse to address their problems, according to Stroh.
"Budgeting is not fun," he says, "but dealing with creditors is even less
fun. Many people will therefore bury their heads in the sand, hoping their
problems will go away. Unfortunately, outside of winning the lottery or
getting a windfall inheritance from a long-lost uncle, budgeting and
consulting with a professional counselor are the only ways to successfully
resolve financial problems."
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Fox Symes assists all Australians discover the truth about their debts and
how they can rapidly reduce them. There are methods available to the
Australian public and you can discover how to use these to assist you in
reducing your debt with a free phone consultation from Fox Symes. Visit
http://www.foxsymes.com.au or contact them directly on 1300 361 204.
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