"Recessions are anything but glamorous," says Clarky Davis, The Debt Diva. "They are a harsh financial wake-up call and many of those lucky people who never had to worry about paying their bills are now facing growing credit card balances and late payments."
If you are struggling to make ends meet, now’s the time to implement your own personal bailout plan to pay off your debt and keep your finances afloat during these challenging times. Here are some tips to get you started:
· Reexamine your budget. It’s important to accept that you must change your spending habits to accommodate the change in your finances and the rising costs of basic living expenses. Don’t let the word budget scare you away from being in charge of your spending. Write down everything you spend, so you know where your money has gone. Then you can make smart decisions about what you really need to spend money on and where you can save.
· Slash Your Spending. Prioritize those expenses that must be covered each month – mortgage, auto payments, utility bills and credit card payments – and find ways to cut out or reduce the cost of extras like cable television, mobile phones, eating out and recreational travel.
· Delete Your Debt. Spending less increases your disposable income. Use your disposable income to take care of your debts, especially credit card debt. Start with the credit card that has the highest interest rate and pay that one off first. Then take that monthly amount and add it to the payments you’re making on your other credit cards. You’ll pay them off quicker and spend less on interest in the long run.
· Contact Your Creditor. Call your creditor to negotiate a lower interest rate and if you are able to make more than the minimum required monthly payment, do so (even if it’s just $5 more).
· Start Your Savings Cushion. While most of your efforts may be focused on debt relief, don’t forget to start a savings fund for emergencies at the same time. A lot of Americans hear that they should have at least 3 months worth of living expenses in their savings account. When you’re living paycheck to paycheck that number seems like Mount Everest and unattainable. Start small. Save anything you can.
· Consider Professional Financial Assistance. If you no longer can afford to make the minimum payments on your credit card(s) and are consistently making late payments, you should consider credit counseling. By seeking support from a debt management company, consumers can take advantage of better repayment terms including lowered interest rates and waived late fees, which are offered by most creditors. However consumers must do their research to find a reputable organization and should look for a provider licensed by the state they reside in and accredited by the Better Business Bureau.
For more tips and information from/about Clarky Davis, The Debt Diva, visit www.thedebtdiva.com.
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