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Creditors Ringing Your Phone off the Wall? 15 Tips to Reduce Your Debt

By Sandra Wellman


When the creditors are ringing the phone off the wall you know itís time to make a serious decision to reduce your debt to pay your bills. Donít worry you are not alone. The United States alone has millions of individuals and families struggling to find a way out of debt. This is why when you go online you see thousands of web sites that say they have the solution for relieving debt. Be Cautious! Many of the companies that claim they can get you out of debt will only bring forth more problems. Be fully aware of what will be happening with your debts.


With Debt Consolidation you are simply transferring debt from one place to another. While this seems like a good choice, and may be for some, the fees are high, you retain the same amount owed, but you will pay more interest in the long run because you are making smaller payments. Also, one potentially bad aspect is your assets are the collateral and at risk if you default on the loan.


Credit Counselors are more prone to help you find a solution to reducing your debt. Credit Counselors are the solution when you do not see a way out on your own. The Professionals work closely with you, your creditors, work toward a resolve, minimizing payments temporarily, etc. This is certainly a way to get creditors off your back, work out an agreement with your debts, and reduce the stress level that comes along with financial burdens. Some of the Credit Counseling Services offer a low fee for their services and provide you with a financial managing solution. The services often offer help with managing your money, as well as offering counseling to homeowners, students, and so on.


There are many solutions for debt relief so the key then is not assuming the worst. Again, the main solution is paying off the debts that are considered priorities. If you have secured loans, it is always wise to find a way to pay these bills first. If you have credit cards and canít pay some of your bills any other way, you might want to consider paying your bills with them, which will give you more time to find a solution to your debt problem. Pay as much as you can on the credit card before the bill comes in so that you have funds available to pay your bills the following month in case you need it. There is always a solution, so never assume that you canít deal with any problem.


One of the main things you need to do to reduce your debt is to cut back on your spending and live within your means. Cutting back is one of the harder things for people to do, but one of the best ways to reduce your debt. You will have more money to pay on your credit cards, which will accrue less interest and start reducing your debt.


            Why is cutting back so hard?

We work hard and we feel we deserve to have certain things and say Ďlife is short, why not be happyĒ.  Ok these things are true to a certain extent, but if you donít want to end up with bad credit, lawsuits, foreclosures, repossessions and so on, you better suck it up and put your pride aside.


           Ways to save money and reduce your debt

There is no one answer for all of us, but there is an answer for us all individually, which will differ depending on your situation and how extreme your debt is. We list here 3 categories for getting out of debt: minimal debt, moderate debt and extreme debt. The more debt that is owed, the more strategies should be applied. Remember all these things can be temporary until you are out of debt or at least reduce your debt. Then just keep on budget so you donít get back into debt.


Minimal Debt


Buy food that is less expensive and last longer. This is not for people on low carb diets; exercise instead, itís good for your stress level. Eating rice, potatoes and pasta with your meals will fill you up and they are inexpensive. Donít buy $3 artichokes, just because you like them. Prime steaks are out of the question. If you like them, buy a pkg when on sale, put it in the freezer and when you have done a good job all month, treat yourself. Buy larger pkgs, separate and put into freezer bags when you get home. Buy almost everything on sale. If I can do this, so can you. Spend 10 minutes reading the grocery ads and go to the one with the best overall deals. If itís not on sale this week it will be next week. Donít spend much or any on alcohol. Itís not necessary and not good for your health. Buy your sundry items either at stores like Target or Walmart or on sale.

Get a part time job. This doesnít have to be many hours. You can write articles, or books for people who bid for your services online. These are brief and can be done in days or weeks.

Sell items you can live without on Ebay or at garage sales. Check the paper to see if neighbors are having one and will let you put in your items. Give them 10-20%.

Stop spending money on things you really donít need. If itís not necessary for survival or to keep your job, donít buy it, rent it etc. Your friends and family have enough DVDís or videos for you to watch, you donít need to spend money renting or going to the movies. If you spend a lot on TV cable, reduce it as much as possible.

Pay your bills on time and avoid late fees. Credit card companies charge the most. $15-35, even if you are only 1 day late. You can call them if itís your first time and they will waive the fee once, but thatís it.

If you havenít ruined your credit yet, try to transfer your higher interest rate credit card debt to a lower one.

If you are married and your other half is a big spender, talk to them about it and tell them what your plans are and that you will need their cooperation.

Keep your air conditioning set high and your heater low. Put sweats on when in your house/apt or even thermals depending where you live to stay warm. Only keep lights on in the room you are in plus one other so you can see where you are going.

Refinance your car loan if you still have at least a few years left on the loan.

            Moderate Debt

Sell your car and buy a cheaper one. Have it checked out first by a mechanic to make sure your repair expenses wonít be high. This is a rough one for most and moderately extreme, but you can save hundreds per month if you are making payments. Hey no one said it would be easy, but itís better than filing bankruptcy or the other things I mentioned. Bankruptcy stays on your report for 10 years, plus in most cases you will still have to pay your debts at some point.

If you live in an apartment, shop around to see if you can get a better deal somewhere else. You may even get a move in bonus or first month discount worth a few hundred dollars.

Shop around for less expensive insurance for yourself, your car and/or your home if you own one.

Get a home equity line of credit if you own a home, but beware to pay as much as you can, or youíve just moved your debt and are not reducing it.

Call your credit card companies if you canít make the minimum payments and settle on a payment plan. Beware they will not let you use your card if you do this, so if possible only do this with the one you owe the most and have the least available credit on, leaving one credit card available to charge for emergencies.    

            Extreme Debt

Hopefully you own a home because you are going to either need to sell it, refinance it or get a home equity line of credit if you donít already have one. Selling your house is very extreme, and should be considered one of the last resorts, but possibly a necessity if youíre really in a bad place and owe a mountain of debt.

Consider taking in a border. If you donít want to sell your house, but youíve got extra room, definitely consider this. You can go through agencies that do background checks on possible borders. Also, your local church may be a place to look for one. You can charge $300-500 per month, depending on whether they eat your food or not.

Of course, as I said earlier, you need to apply all or most of the strategies listed for all categories if you have extreme debt, to save money and reduce your debt.

If you have a family member that is good with accounting, budgeting or finances, ask for their help before going to a counseling service. It may save you time, money and energy. If you are too embarrassed to speak with family members and you just canít do it yourself, then by all means check out the credit counseling services listed here on our web site.













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