The most vulnerable area of your finance is your debt that you owe to your creditors. Until and unless you can get out of it, your chances of having a healthy financial future are slim to none. Clearing off all your debt can not be done over the night even if you enroll debt management plan. You may have already accumulated huge interest and late fine penalties over the time. Therefore, proper planning is required with a bit of patience to achieve financial freedom.
- Checking the debt to income ratio is the first step of understanding your financial status. Knowing the ratio you can get an idea about how much time it could take to clear off your debt. If the amount of debt is much greater in proportion against your income, naturally it would take longer time to clear it off. However, much depends on how keen you are to get debt free. It also depends on the level of compromise you can afford to give on your expenses. The more money you can cut back on your expenses, the more money you free up for paying debt.
- Now, you have to scrutinize the inflow and out of your money. There are numerous pockets from where money could flow in or flow out. You need to locate those areas and try to restrain the out flow of money at any cost. Sometime we stay under false impression about of finance. So, there should not be any matter of self-complacency regarding the monetary transaction that your household is experiencing throughout the month.
- Cutting expense on grocery and utilities can be difficult. But, if you buy coupons on-line, make bulk purchases while food items are on sale, then you can buckle down much of your monthly grocery bill.
- By paying your monthly insurance premium you can rest assured about any unseen emergency crisis. So, be careful about paying the premiums on time so that the policy does not lapse.
- Enrolling in debt settlement program may reduce your total amount of debt. You may get the benefit of paying less than you owe. But, this may also bring tax consequences on you. So, you should consult a financial advisor before enrolling in a debt settlement program.
If you sincerely follow these programs, we hope that you will be able to get back on your feet faster.