How to Be Debt Free

from wikiHow - The How to Manual That You Can Edit

Are you in debt? Do you want to be debt free? Do you think that being debt free is getting to be too hard for you or is impossible? Well, maybe this guide will help you.

Steps

1. Assess your problems. If you are in debt, figure out how much money you owe. Who do you owe it to? Is it the bank, a car dealership, or simply a friend that you lost a bet to? If it is just $0-100.00’s look for a job to work and as soon as you get your paycheck, pay-up your debts. If it is a little bit more, keep working until you have worked it all off. If you need more than a few hundred dollars, you can either work it off, go to step two, or both!
2. Change your behavior. If your debt is a result of overspending (for example, you buy mass quantities of everything and/or buy things that you want, but are not necessary for living), do some budget planning. Get a friend who can save and doesn’t have the spending habit. Bring him/her along when you need to purchase something. That person will be able to provide some advice to you.
3. Itemize your highest interest debts (generally credit cards, then car payment, then mortgage, etc.) and make minimal payments on everything but your HIGHEST INTEREST debt. Pay this off.
4. After debt 1 is paid off, put the payment amount that you used to get it paid off in record time into the next highest interest debt, and so on. The new extra money that you put forth into the next debts is called your accelerator margin and you continually build it. Those of you who own Transforming Debt into Wealth know exactly what I mean. You are compounding the money that you are using to pay off your debts. These two steps are IT in a nutshell…except it assumes you have some cash flow.
   • most people try to live beyond their means to temporarily improve their quality of life. This only makes things infinitely more difficult in the future, and impossible to overcome in older age.
5. Prevent debt. Every paycheck, put aside some money for bills, food, and other needed necessities of living, and some money aside to save. Also put aside a little money for non-necessities; it is important to be able to to buy things you want without going into debt. Keep saving money, and paying off bills so that you can pay off your debt.

Tips

• Do some budget planning. Plan how you will spend your paycheck
• Don’t buy something just because you really want it. Buy only things you need.
• Spend as little money as possible.
• Take up a hobby that involves no money-spending.
• Try to save gas money by walking, biking, skateboarding, etc. wherever you need to.
• Avoid using credit cards! Seriously! The easiest way to avoid debt is never, never charge anything on a credit card. If you absolutely think that you need a credit card (to “help” get a good credit score) use the credit card only for purchases that you can pay off at the time you use the credit card. Pay off your credit card bill completely when it’s due. Don’t leave anything to accrue interest and definitely don’t delay for late payment charges, those are just extra expenses. This way you will earn a good credit score without taking on more debt.

Warnings

• Do Not! fall into the illusion that living a more show-off life NOW in young years will improve your quality of life and friends. No one cares what you own, and if they do, they themselves are insecure. If you want to have nice things, make sure they’re for convenience and you can pay cash for them.

Things You’ll Need

• Cash flow
• A new way of budgeting, spending and most importantly; living

Related wikiHows

• How to Get Out of Debt
• How to Arrange an Individual Voluntary Arrangement (IVA)
• How to Choose a Debt Management Program
• How to Deal With Collection Agencies
• How to File Bankruptcy
• How to Maintain Good Credit
• How to Wake up from the American Dream

Sources and Citations

• Debt Advice - A ‘Not For Profit’ organisation able to offer free impartial debt advice

Article provided by wikiHow, a collaborative writing project to build the world’s largest, highest quality how-to manual. Please edit this article and find author credits at the original wikiHow article on How to Be Debt Free. All content on wikiHow can be shared under a Creative Commons license.

True or False: The only way to view your credit report is to purchase a copy from one of the three major credit reporting agencies (Equifax, Trans Union, or Experian).

FALSE. The three major credit-reporting agencies, Equifax, Trans Union, and Experian, are each required to provide consumers, upon request, a free copy of their credit report once every 12 months.

You have three options to obtain your free copy:

• Go to AnnualCreditReport.com
• Call (877) 322-8228
• Contact the Federal Trade Commission (FTC) to obtain a copy of the Annual Credit Report Request brochure. You can fill out the form on the back of the brochure and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
  • To request the brochure, you can contact the FTC by phone: at 1-877-FTC-HELP, or download the form at: www.annualcreditreport.com

Well, folks, there you have it. Another money myth dispelled. This happens to be an important money myth because many people never see their credit report for fear of the cost. This allows for errors that could be addressed to never see the light of day thus hurting the consumer for reasons they are not even aware.

So, if you haven’t seen your credit report in eight years or worse still, NEVER, please follow the above steps and order your free credit reports today.

For more information, visit CareOne Credit.

‘Caveat emptor’ or ‘let the borrower beware’ probably holds true of any industry, but especially so in the financial services sector. While there are no hard facts to support this, my sense is that for every legitimate debt counseling service that arrives on the scene, three fly-by-night debt counseling services are also spawned.

According to a post on MSN Money titled The consumer’s guide to credit counseling, poster Liz Pulliam Weston offers the following red flags to be on the lookout out for

• Big upfront fees. Consumer Credit Counseling Services typically charge a $10 set-up fee. If you’re paying a lot more, you may be the one who’s getting set up, unless you’re getting extensive and personal money coaching that could justify the fee.
• No accreditation. Legitimate credit counseling firms are affiliated with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.
• Delayed or missing payments. Some companies pocket your first months’ payments as a fee, rather than passing the money on to your creditors. Missing payments can hurt your credit rating. Find out how much of each monthly payment is going to your creditors, and when it will be sent to them.
  
• Unrealistic promises. Some companies falsely promise that you can settle your debts for little or no money, without hurting your credit rating. Legitimate credit counseling services help you pay back what you owe, albeit at lower interest rates, and acknowledge there may be some affect on your credit rating and ability to obtain new credit.

Above all, let common sense be your guide. I have said it here a hundred times before and I will shamelessly continue to say it: If it sounds too good to be true, it is.

Read the entire post at MSN Money.

Here is a discussion from wikiHow discussing this very subject: living a debt-free life. Within this reader-created list, there are good tips on how to reduce debt and even if they don’t necessarily suit your specific financial scenario, these pointers are a good launch pad for you to begin fashioning your own roadmap to a life that is full and free of as much of the burden of debt as possible.

How to Start Living a Debt Free Life

from wikiHow - The How to Manual That You Can Edit
A Debt Free lifestyle is easier to attain than you think. It doesn’t matter how much money you make or how in debt you are. Once you learn how the only bills you’ll pay are utilities. No mortage, no car payments.

Steps

1. Stop adding to your debt. Cut up the credit cards and throw away the checks so you can’t bounce one. Do not sign up for any more credit cards or loan offers. Stay away from Pay Day Loans. Remember - If you can’t afford it today, you can’t afford it tomorrow (meaning don’t expect to pay tomorrow for debts incurred today at the gaming store).
2. Admit you are in debt and start living like it. Did you know that most millionaires live in modest homes and drive used cars? That’s why they are rich. Don’t expect to eat out at fine restaurants. You can’t afford it, get over it. You will be able to go someday soon but not now. Don’t buy new clothes for a while. There is nothing wrong with what you already own. Saving that money for a few months will help get you back on your feet.
3. Total up your debt. Go ahead and face the music. You need to open all those unopened bills. Make a list of all your debt, big and small.
4. Pay with cash only. While debit cards are OK to use once you get in control they can still allow you to spend more than you should but at least it’s not like a credit card.
5. Talk to your creditors. Don’t ignore them, they won’t ignore you. If you keep in contact with them, they will be more willing to work out a plan with you. If the first person you speak with is unwilling, then ask to speak to their supervisor and just keep going until they are willing to work with you. Be honest and pleasant, no one wants to help you if your nasty.
6. Make a plan for which debts to pay first. You need to pay everyone something every month even it’s it’s only a dollar, but you need to have one debt that you are going to get rid of first. Target the one(s) with the highest interest rate. Which reminds me … Call them and ask them to reduce your interest rate - many times they will do this, just because you asked!
7. Roll over the savings. Once you have one debt paid, apply that money to the next debt you are trying to pay off and just keep going.
8. Get frugal. So you don’t like cutting coupons? Too bad. If you could save $10 on your shopping next trip why wouldn’t you? Buy a cheaper brand of toothpaste. Use half the toothpaste you currently do - the size of a pea is all you need. And think about it, that $4.00 tube is now really only $2.00 … because you are making it go twice as far! it’s the little things … lots of little things add up. And even though it may be kind of “nerdy,” it is actually fun to think of all the little ways you can save money. Food shopping, buy whats on sale and learn to live with it. You’ll save and not starve. Go to matinees instead of the nighttime movies. Make your own lattes instead of Starbucks. Think to yourself what it is you really like … and then think of a way you can do it cheaper! Homemade chili is so much tastier than canned. And you can add all the things you love … Beer? Cilantro? Jalapenos? Cheddar cheese? Just the way you like it! Drink alot of bottled water? Refill them at home. The savings will rake up. Take your lunch to work, eating at the fast foods and deli’s cost alot of money.
9. Be conservative with your utilities. Lower your thermostat in the winter. Spend the evening at the library instead of heating up your place. And read their magazines and drop your subscriptions. Fix leaking faucets, turn off unused lights, etc.
10. Change your way of thinking. Instead of saying that something only cost a dollar think of it as keeping that dollar instead. That dollar will grow interest for you. So that item doesn’t really just cost a dollar it costs you your future!
11. Learn how to invest … not just save … but invest. Think of every dollar your money is not earning as future money just dribbling out of your pocket. Look up an investment class at your local university. Or check Craig’s List. You will find something if you really want to. (Talk to a teacher or a librarian if nothing else is working.) Then make your money work for you! Yes it takes time. But you can either have $100,000 (and easily more!) when you are 40, or not! Just check out those compound interest tables. You cannot believe how easy it is if you just get started now. If you are young, you have time on your side … and time is one of the major factors with compound interest. If you have a 401K at work, put in 1% if you can, just to start it. You really wont miss the money, but you know in the back of your mind that you have something good going for yourself.
12. Save for a rainy day. Old cliche I know, but it’s true. Try to put away 10% of what you make into savings. If you can’t do that then put away whatever you can. Even if it’s .50 cents. Make this your first bill that you pay. Because you are the most important thing you need to take care of. Then learn how to make your money work for you (tip: The stock market is the fastest and surest way to make the most money - over 10% over the long haul - no kidding - look it up!
13. Gas prices are high. Combine your errands togather. Don’t go out for just one errand, do them all at once, Get gas, stop at the post office, drug store and grocery shopping. Try to combine some of those before and after driving to work. You’ll save more each month than you think.
14. Get rid of the stress. Being in debt is not normal or healthy. Take some time out for you to just relax. You will be better able to handle the debt when you are rested. Check out a library book or two - something light or humorous. Make popcorn (cheap) and have a wonderful, carefree evening.
15. Don’t ever think that your alone in this. So many people are trying to get back on their feet. Yes it’s hard to give up alot of the things that in the past have made you happy. Doing all the things above, as hard as it is, will help you in the long run.

Tips

• Think before you buy anything. Do you really need it? If not put it back.
• Be strict with yourself.
• Be strict with children, the I Want’s have to go away even if it means crying through the whole store (I’ve done it)

Warnings

• Reducing your debt can be addicting. Remember to reward yourself once in awhile. You deserve it.

Related wikiHows

• How to Be Debt Free
• How to Get Out of Debt
• How to Repay Your Debts
• How to Choose a Debt Management Program
• How to Deal With Debt Collectors
• How to Start Living Frugally

Article provided by wikiHow, a collaborative writing project to build the world’s largest, highest quality how-to manual. Please edit this article and find author credits at the original wikiHow article on How to Start Living a Debt Free Life. All content on wikiHow can be shared under a Creative Commons license.

Now of course, if your finances are such that you are about to lose everything for being charged up and mortgaged up to your eyeballs, then debt consolidation is a wise choice. A good DMP can give you the time and space you need to get a handle on your financial situation and avoid disasters like closed accounts, foreclosure, and having your credit score tank. The flip side, however, is that you lose your ability to charge new purchases and establish new lines of credit. Furthermore, your credit scores do go down for a period until a consistent repayment pattern has been established.

With that said, the most prudent approach to consolidating your debt is to make a plan. This concept was outlined well in a post on Prosper.com titled Prosper Debt Consolidation Lo - Tips for Potential Borrowers that organizes the whole ‘planning process’ and helps prospective borrowers determine a) if they need to take out a debt consolidation loan in the first place and b) if they do, which debts should they have included as part of the plan. Many people erroneously believe that since they are consolidating anyway; why not include all of your debts? According to the article, that could be a bad idea for the following reasons

1. Lower amounts fund quickly. You are more likely to get funded if you request a small amount. It will take fewer lenders to fully fund a small loan. Also, its going to seem less risky for them. They want to see a monthly payment that you can definitely handle. Plus you’ll have a lower DTI, that helps too.
2. More likely to get funded at a higher rate. If you’re credit is less than perfect, you can not expect a low rate. By selecting only your highest interest debts for this loan, you can reasonably ask for a rate that will save you money.
3. Gain leverage with the credit card companies. As soon as my balances were paid in full, Chase and Discover began to see the light. Credit limit increases and great balance transfer deals started flying my way in no time. APRs were dropping like flies. For example, Chase offered me a fixed 5.99% balance transfer with no fee. That is a great deal. I was able to use that on my next highest interest credit card account for additional savings. I would have lost the opportunity to take advantage of that if I had consolidated all of my debts at once. You might also want to stay on the lookout for 0% transfers for some of your remaining balances. No loan on Prosper will ever beat that deal!

This is an example of the great information that the article outlines in the following steps

1. Examine Your Budget
2. List Debt Obligations with Interest Rates
3. Determine a Cut-Off Line
4. Determine a Good Rate

So, if you are in the process of designing your debt consolidation loan strategy, follow the steps this article prescribes and make your decision to consolidate your debt a smart one.

Read the full post on Prosper.com.

How to Deal With Debt Collectors

from wikiHow - The How to Manual That You Can Edit

How to deal with those pesky Debt Collectors.
What do they want? What do you want? How to find a common solution.

Steps

1. When a Debt Collector calls, make sure to speak in an even tone.
2. Ask for identifying information: such as a return callback number, the collectors name, and information about the debt itself.
3. Remember, if you owe the debt, do not try to wiggle your way out of it.
4. If you cannot pay the balance in full, tell the collector that right away, this will save any headaches on your part, as well as the collectors part.
5. Know how much you can afford in any repayment scheme, and keep to it.

Tips

• There is no easy way out of a debt, regardless of the fly by night operations which you will encounter promising ways to get out of your obligation to pay a legally incurred debt.
• Remember, a professional debt collector knows more about you than you think, it’s called skip tracing, and it works!
• Do not fall victim to the idea that shouting, or abusing a debt collector will get them to go away.
• The laws are clearly on the side of the consumer, but an intelligent debt collector will find a way to make you pay, either voluntarily, or through civil judgment, and garnishment, and/or property liens.
• The debt collector is not there to insult you, or abuse you, so don’t do it to them.
• If you feel like you have been mistreated there are remedies available to you, contact the manager of the collection agency. If that fails to get the result you want, contact your local bar association for an FDCPA attorney to aid you.

Warnings

• Do not buy into the “Get out of paying your debts” schemes that are prevalent on the internet, they do not work, and could hurt you financially.
• The ONLY approved ways out of debt are to pay, or to file bankruptcy if you qualify.

Things You’ll Need

• Have pen and paper ready at least near your phone and your door. You want to have everything in writing.

Related wikiHows

• How to Get Out of Debt
• How to Choose a Debt Management Program
• How to Pay off Credit Card Debt
• How to Get out of Debt Legally
• How to Politely Deal With Telemarketers

Article provided by wikiHow, a collaborative writing project to build the world’s largest, highest quality how-to manual. Please edit this article and find author credits at the original wikiHow article on How to Deal With Debt Collectors. All content on wikiHow can be shared under a Creative Commons license.

Catalog Choice is an online service that allows users who sign up for a free account to send automated messages to retailers telling them that they no longer wish to receive their catalogs. I have used this service for a few months now and I think that it is fantastic. I live in an apartment and have one of those tiny apartment mailboxes so, you can imagine my frustration when I try to get my mail and the IMPORTANT letters are wedged in behind nine catalogs, all of which are for products I do not even use.

There mission is a noble one

The mission of Catalog Choice is to reduce the number of repeat and unsolicited catalog mailings, and to promote the adoption of sustainable industry best practices. We aim to accomplish this by freely providing the Catalog Choice services to both consumers and businesses. Consumers can indicate which catalogs they no longer wish to receive, and businesses can receive a list of consumers no longer wanting to receive their catalogs.

On a practical level, however, their service helps free up peoples time and mental space. I have noticed that a reduction in the amount of junk I receive in the mail actually does have an effect on my peace of mind. And speaking of making a difference, you will also be able to sleep better at night knowing that you are helping to cut down on the wasteful use of paper for catalogs that most of us never even look at.

To sign up or for more information, visit their website at http://www.catalogchoice.org/.

Pagliani does a fine job analyzing the logistics and organizing the steps to a successful sale which are usually haphazardly executed at best. His advice transforms the once mundane garage sale into an enterprise and elevates the lowly homeowner standing on their lawn with a bunch of old dishes on a folding card table to the status of a ‘Garagepreneur‘. Such a lofty title would make even Fred Sanford proud.

So what’s the secret? Pagliani outlines what apparently derives from a larger text titled Secrets of a Successful Garagepreneur: A Step-By-Step Guide to Making Serious Money on Garage Sales. The steps are

1. Do good reconnaissance
2. Design a floor plan
3. Learn how to choose the right stuff
4. Find good suppliers
5. The Zen of garage sale pricing
6. The five Ps of marketing

He goes on to say that

The first thing to understand is that a profitable garage sale — like any other profitable business — is not just dumb luck. Successful Garagepreneurs know how to offer the right products at the right price at the right time…and cleverly promote each garage sale event.

There’s more to a successful garage sale than planting a Garage Sale! sign in your front yard and piling up a bunch of junk on a couple of card tables. Garagepreneurship is estimated to be a $2 billion per year industry — that’s right, industry. Some enterprising Garagepreneur will make serious money this year.

Will that Garagepreneur be you?

Read the entire post on Buzzle.com.

According to the website

The Rapid Debt Reducer is a “smart money manager” that identifies areas of unnecessary spending and teaches consumers how to use this money to crush their debts. As strategically paid debts are eliminated, the software shows how to use the freed money to eliminate more debt, repeating the process until the last debt is gone.

While most of us have heard that advice 100 times over on Oprah or other shows, the hard part is actually figuring out the numbers. The Rapid Debt Reducer is a perfect tool that does the ‘figuring out’ for you and allows you to take the most appropriate and effective actions toward your goal of being debt free.

For more information visit The Rapid Debt Reducer website.

MSN Money has a nifty little debt evaluation calculator that does just that in a few, easy steps. This is not for a detailed, in-depth analysis of income and spending, but rather a good way to provide a snapshot of your financial situation. There is even a summary at the end of the wizard-like interface that basically tells you if you are in good shape or in a world of trouble, money-wise.

Put your numbers in and see how you fare. For those of us who have a difficult time approaching this process, this definitely qualifies as a positive and powerful first step. Evaluate your debt now with MoneyCentral’s Debt Evaluation Calculator.