Debt Free and Carefree

Are you still clearing a mountain of debt amassed last Christmas or even during last year's summer holiday?

For those of you who make financial plans, who budget and save, you can skip this article. For those who get a little carried away, who regularly spend more than they can afford, this article is for you.

Money worries affect us to the core of our beings - especially when such worries are generated by a lack of this resource. (Yes, having money also brings worries albeit of a different kind).

It is so very easy to spend more than we have, indeed it has become a way of life to many. Each month Peter is robbed to pay Paul. Our salary cheques are spoken for as soon as they hit our banks. People find themselves unable to clear their credit cards each month and then are forever playing catch up with high interest payments.

What can be done? The first thing is to face the situation. A full financial inventory is required listing everything you own of value, savings, bank accounts and other assets and matching that against everything you owe. Make sure you know what your monthly income is against your monthly outgoings. It is essential that you have the full picture before planning your next move.

The severity of your financial situation will dictate your next move. If your assets exceed your liabilities it may be as simple as arranging a loan from a responsible lender, such as your regular bank, and using this to settle the high interest credit card debt leaving you with one manageable monthly payment. We'll talk about the way forward after you have taken this step in just a moment.

If it is not possible for you to obtain a consolidation loan you will need to manage your existing debts responsibly. The first thing to do here is check the interest rates being charged and shop around for better deals. It will be possible to transfer balances across to new lenders - provided your credit record has not been blemished by irregular and late payments or defaults.

At all costs it is important to take advice from a qualified person before entering into any arrangements with "alternative" lenders.

And, of course, there is the worse case scenario that when you do your financial audit you find that you have insufficient assets and insufficient income to meet your debts. The important thing to remember is that your problem will not go away. Ignoring bills and reminders will only make your situation worse. If your position is such that you are going to struggle to make the minimum payment, let your lender know. Contact them before they contact you and, on the whole, you will find them to be understanding and helpful. Put together a repayment plan that you can meet and send this to your creditors for agreement.

When you have done all you can to improve the immediate situation you must begin to repay the debt. The debt bearing the highest interest rate is to be repaid first, (this is your number one priority debt) with minimum payments only being made on other outstanding accounts. To protect your credit rating it is essential that at least minimum payments are made, on time, each month.

Once your number one priority debt is cleared you focus on making the same additional monthly repayments to the next most expensive account and continue with this until all debt is cleared.

Smart individuals will retain at least one credit card and use this each month, leaving their salaries on a high interest earning deposit account, only withdrawing funds when the card balance is due to be cleared. They live on borrowed funds for up to six weeks at a time whilst earning interest on their own funds. Clever.

However, you may find it easier at first to put all credit cards away until such time as you have mastered a new way of being around money.

Getting yourself clear of debt could take months or years depending on the level of indebtedness and the amount of disposable income you have to make repayments each month. Once you are debt-free the secret is not to find yourself in this situation again.

It is important to understand how the debt amassed. Do you not earn enough to sustain your current lifestyle? Are you spending more money than you need on mortgages, rent, utilities, groceries? Do you take the time to look at prices and shop around? What can you cut out of your life which has a cost and which is not essential? When you go on a spending spree, what need is this meeting? How else can you get this need met? It may be that your cost of living is high because of your working hours e.g. when working long hours it is easier to pick up a take away than to prepare a meal. It may be that you will want to consider seeking qualified help if over-spending is a behavioural problem or addiction.

Just making the effort to get out of debt is rarely enough. Real work is required to change your relationship with money to prevent the same situation recurring in the future. Building a new relationship with money and "things" is part of a personal growth and development path which we are each ready to follow at different stages in our lives. Some learn to handle money very young - others never do.

Donnie Harrison is a personal coach and professional mentor who works with individuals building professional practices, especially in the healthcare sector. Further information from http://donnieharrison.com

Nigeria: G8, Poverty And Africa
AllAfrica.com, Washington - Jul 8, 2008
We have some aid, but not enough, some debt relief but not enough and virtually nothing on trade. Once again Africa's people have been short-changed. ...

Response to "Unconditional Debt Relief is Not the Answer for ...
Ghana Dot, Ghana - Jul 7, 2008
Further, the Jubilee Act recognizes and works to end the unsustainable ‘lend and forgive cycle’ that has brought on the need for debt relief. ...
US Jubilee Act rewards past African leaders reckless behavior Ghana Dot
all 2 news articles

NDTV.com
Debt relief Waiving, not drowning
Economist, UK - Jul 3, 2008
In Sikandrabad one farmer could not quite believe that the pink slip he had been given released him from 25000 rupees of debt. But others did not get the ...
Banks in JK identify 34000 beneficiaries for debt relief GreaterKashmir.com (press release)
Union Bank completes farm-loan waiver, relief programme Hindu Business Line
Himachal government urges to Centre to look into debt relief ... myHimachal
Business Standard - NDTV.comall 81 news articles

Obama Donors Aren’t Rushing to Aid Clinton
New York Times, United States - 7 hours ago
... but what I think the sensible elements of good will are trying to achieve is debt relief for Hillary consistent with getting Barack elected president,” ...

GulfNews
Wave of attacks kill 16 in Iraq
Seattle Times, United States - Jul 7, 2008
The Abu Dhabi government announced the debt relief and the naming of a new ambassador to Baghdad shortly after al-Maliki began a visit to the wealthy Gulf ...
$7bn debt relief Gulf Daily News
Report: United Arab Emirates cancels Iraqi debt The Associated Press
UAE Vows To Forgive $7B In Iraqi Debt Evening Bulletin
Hot Air - CNN Internationalall 550 news articles

Ecuador Debt Policy Hinges on Audit, New Finance Minister Says
Bloomberg - 5 hours ago
... audit will be crucial,'' Salgado, a 55-year-old economist who studied in Mexico and France, told reporters today after an event on debt relief in Quito. ...

Radio Australia
Hard issues hit G8
Joy Online, Ghana - 20 hours ago
Loans were approved for countries that already qualified for debt relief under the Heavily Indebted Poor Country (HIPC) Initiative. ...
Business.view Africa shines Economist
Editorial: Why we are sceptical about G8 meeting Business Daily Africa
Mbeki to press G8 leaders on Africa Independent Online
Winnipeg Sun - Toronto Starall 509 news articles

Dhumal writes to FinMin for debt relief anomalies
Business Standard, India - Jul 3, 2008
... has sought removal of numerous anomalies in the Union government's debt relief scheme so that majority of farmers of the hill state could be benefitted. ...

Syndicate bank extends debt waiver relief to 3.93-lakh farmers
Hindu, India - Jul 2, 2008
The bank said it is confident of completing the total process of handing over debt waiver and debt relief certificates to the eligible farmers latest by ...
Kerala banks display debt waiver lists Business Standard
all 5 news articles

Boston Globe
Obama proposes easing consumer bankruptcy laws
Reuters - 17 hours ago
"I'll reform our bankruptcy laws to give Americans who find themselves trapped in debt a second chance," Obama said at a town hall event in Powder Springs, ...
Obama Calls For Bankruptcy Law Reform Consumer Affairs
all 431 news articles

Wind Chimes and more...

Windchimes for great gifts!

Bankruptcy, Is It A Way Out