Cheap Living Tips

Should you consider debt counseling, debt settlement, or self-help credit report books? There are advantages and disadvantages to all of these options and the best way to decide which one would be best is to evaluate yourself and your total debt situation. By being totally and completely honest about your situation and whether you are ready to take a self directed or directed approach, you can make the best decision for you.

Your first step is to sit down and evaluate all of your current, past due, and delinquent accounts, how much percent and penalties you are paying for each, etc. Then, understand what each option entails and figure out which option is best.

Debt Counseling

Debt counseling is when you work with someone who is knowledgeable about finance (specifically budgeting and debt reduction). They may have even experienced debt problems in the past and gotten themselves out of debt. His or her expertise will give some invaluable insight on how to settle or pay down your outstanding bills with various payoff methods. This process will not erase your debt but will teach you how to budget your money so you can afford to pay off your debts over a period of time. This method is best for someone that doesn’t have much confidence in the self-directed approach and needs accountability and guidance.

Debt Settlement

Debt settlement or debt negotiation is when you or someone you hire, works with your existing creditors to settle your debt for less than you owe. This option is typically only available for individuals who are already delinquent on their payments as their creditors are more likely to settle the debts so that they can recoup some of their losses. Keep in mind that the fees collected from debt settlement attorneys can be extremely high – as much as 15%.  In addition, your credit rating will likely receive a ding as a result of debt settlement. Plus, not all states allow for debt settlement, and you cannot use this option for secured debts like auto loans. This method is best for someone that doesn’t care as much about a lower credit rating but just needs help paying down debt. Although one could take the self-directed approach, it may be better to work with a professional that is versed in negotiation to receive the real benefits. If you do, just be prepared to pay extra.

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Self-Help Credit Report Books

Self-help credit report repair books are guide books purchased to teach yourself how to get out of debt. The cool thing is that there are quite a lot of self-help credit books that are available for a small one-time fee. Popular authors include Suze Orman and Dave Ramsey. In these books, they teach you step-by-step how to get out of debt. However, you will have to input the ideas and really take action if you want to get out of debt using self-help credit reports and books. This method is really good for someone who is drowning in despair, debt, and constant hounding of creditors. Someone with commitment and someone that can take action all by themselves.In conclusion, determining which method is best for you, is really a personal decision. By carefully evaluating your options and then taking immediate action – you too can get yourself out of debt, whether alone or with the help of a specialist. Good luck to you!

If you are burdened with your debts and want to get out of this trouble, you can take help of debt settlement services. You also need to reduce your expenses by practicing frugal living. You will be able to save money and be gainer in the long run.

Debt settlement

If you enroll yourself in debt settlement services, the company representative will start negotiating with your creditors, on your behalf. Your current debt amount may be reduced by 40% to 60% and you have to make a fixed monthly payment in a trust account. When the money will accumulate into a lump sum, equaling your debt amount, your creditors will be paid with that money.

You have to pay taxes for the amount of debt forgiven by your creditors. You also need to have ready cash to pay the charges taken by the debt settlement company. So, to ensure that you have enough money to make the monthly repayments, you need to do frugal living.

Benefits of living frugally

Frugal living doesn’t mean that you have to sacrifice your joy and can’t buy anything anymore. It only means that you should resist the temptation to spend extravagantly on things you can live without. The benefits of frugal living are:

* Be debt-free: If you can live frugally and spend less on things which you actually don’t need, you can save more money. You can add this extra cash to your minimum repayment amount, so that your repayment amount quickly accumulates to pay off your debts totally and you can become debt-free in a shorter time.

* Retire early: You can save more money if you stop spending extravagantly. You can keep this extra money in a bank and when it accumulates into a fairly large amount, you can take an early retirement and enjoy your days in leisure.

* Take trips: If you like to travel to different places, you can take a vacation using the money you have saved by frugal living.

* Save more/invest more: If you can save more money by frugal living, you can invest more money on shares and earn more.

* Less work: If you practice frugal living you will be able to save so much money that at one time you won’t need to do any job and can enjoy your life in any way you like.

How to do frugal living

You can practice frugal living by following the things mentioned below:

* Use coupons: You should collect as many coupons as you can from various newspapers or magazines on the items you need to buy. You can put the extra cash you will save to your debt settlement account, so that you can pay off debt faster.

* Do extra jobs: You can do some extra chores in your home like mowing the lawn or cleaning the house, instead of hiring someone. Thus, you will be able to save money.

* Have a yard sale: If you have got extra junk in your house like your old toys, clothes, furniture, electronic gadgets, you can put up a yard sale. The cash you will earn from the sale can be added to your debt repayment amount.

* Cut down expenses: You need to cut down on some expenses like, smoking less cigarettes, consuming less coke or beer, walking more to save money on gas, eating out less, etc.

* Stop impulse shopping: You should resist your temptation to buy anything on impulse, which will not be used by you.

* Buy in bulk: You should buy in bulk amount to save money. A carton of milk will be more economical than 5 to 6 tins.

* Less usage of credit card: You should use credit card as less as you can. You can only use it to buy a specific large item.

If you can practice frugal living today, you will be able to get out of debts faster and lead a tension-free life in the future.

Jason Holmes is a regular writer with Debt Consolidation Care and is also a contributory writer with other financial sites. His expertise is woven around various aspects of the debt industry and with his e-books he tries to impart to people the different situations and simple solutions to get out of difficult situations. Some of his works include e-books like ‘Credit Score The Quintessential Therapy for a Happy Pocket’, Take Creditors and Collection Agencies to Small Claims Court’ and, My Story- From Depression To a Smile’

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