Thursday, November 19, 2015

Life After Debt

Many American families are finding themselves deeper and deeper in debt. Complicating matters even more, legislation makes it harder to declare bankruptcy, and saddles filers with a greater percentage of their debts to repay. If you, too, find yourself in trouble financially, there are usually no easy answers - but there are some ways out for those willing to commit to changing their spending habits.

Life Without Debt – But How?
Your ability to pay your bills can be affected by situations beyond your control such as serious illness, divorce, or unemployment. Poor financial management can also threaten your economic security. You may be able to juggle your creditors for a time, but eventually you may come to realize you need help in resolving your financial problems.

  1.  Consumer Debt
    The first step in regaining financial control is to limit, if not eliminate, the use of consumer debt. One popular radio talk show host suggested you put all of your credits cards in a resealable bag, fill it with water, and freeze them. Continuing to charge will delay your eventual day of reckoning, but only worsens your overall financial hardships.
    Whenever possible, it's best to pay your living expenses in cash, using credit as a convenience that you pay off in full at the end of each month. If you cannot pay your bills in cash, you need to seriously consider your standard of living and how you might be able to get by on less. Sit down and make a plan that's livable for you.

  2. Credit Counseling Resources
    Consider reaching out to the National Foundation for Credit Counseling
    ® (NFCC®), a non-profit organization with offices in all 50 states. The NFCC® can help you arrange repayment plans that fit your income level and ability. They will study your debts, analyze your income and help you work out ways to overcome your financial problems. You can call 800-388-2227 or visit their website for information about the closest member agency.

  3. Consider A Consolidation Loan
    If you have equity in your home, consider a home equity loan. This allows you to use the equity of your home as collateral for the loan, and can be useful for financing major expenses, or in this case, paying off large amounts of debt. Home equity loans can consolidate all your consumer debt into a single payment, usually with a lower interest rate and often with income tax deductible interest. However, you should be careful not to tap into your equity, only to run up consumer debt again.

  4. Commitment
    If you create a strict plan for eliminating your consumer debts and stick with it, it could take as few as two and as many as five years to implement your plan. The first step in any debt reduction plan is a sincere commitment by the entire family to control spending and eliminate financial waste.
There is life after debt - but it takes constant financial discipline and a commitment to living within one's means to stay that way.

If we at Kemp Harvest Financial Group can help you in any way with regard to your financial planning needs, please feel free to contact us.

For more topics like this, check out our radio show “Retirement Plain and Simple” every Saturday morning at 8 on WNPV 1440 AM and like us on Facebook!

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