Momma Stuff

Some people may feel that advice on debt management is too late for them. ‘I’m already under a landslide of bills and commitments. How do I get out?’ The fact is that it is never too late to start.

The first move should be to establish a working relationship with a reputable bank. If you must borrow, this is where you will likely get the best interest rate. If your bank refuses you a loan, it is probably doing you a favor. Remember, it is in the business of lending money and will lend it to you if it seems reasonable.

Second, you must start paying off the debts in some organized way. On paper, project your anticipated personal cash flow over the next 24 months. Be realistic. Include every bit of income you expect to have. Then list everything that must be paid. Include some allowance for items that you cannot even think of right now. List the debts in order of priority. Then allocate your money on a fair basis so that each debt receives at least some payment. Set a target payoff date for each debt.

In conjunction with this plan, consider where you might reduce costs. Debt reduction always requires some sacrifice. Can the grocery bill be shaved by bargain shopping? What cheaper substitutions can be used in meal planning? Can vacations be cut? Can your living standard be reduced? Can some luxury items be enjoyed less often? Sometimes we just have to be ruthless with ourselves. Certain expenses can be moved from the “necessities” column to the “luxuries” column.
Once you have a plan worked out on paper, discuss it with your bank loan officer. He will be impressed when he sees that you mean business. He may be able to show you how to improve the plan. He may even suggest a debt consolidation loan. If so, be sure to consider the interest rate and the length of time over which the consolidated debt is to be repaid. It will usually mean smaller payments over a longer period of time. But do not be tempted to use the debt consolidation to borrow more money.

There is also a good resource site that you can research about bad credit loans. Badcreditoffers.com aims to help people with bad credit standing to get back on their feet financially. It compares a lot of different offers so from major providers so that you can chooses whichever suits your needs.

With determination and best efforts, you can get out of debt.