Very few families remain unscathed by this economy. Those that were
struggling before the economic downturn didn’t have a chance at holding
things together financially. Even families that were doing quite nicely
before are now struggling due to unemployment, underemployment and the
rising cost of almost everything.

Everyone is hurting, and there has never been a better time for families
to get out from under their debt burden. Debt services are designed to
help people turn their lives around and get out from under debt.

They do not help people file bankruptcy or avoid paying debts; they help
families adopt a strategy to get out of debt and stay out. Following are
5 things that debt services can do for you:

1. They can stop harassment from creditors. In some cases, they can even
halt lawsuits and wage garnishments. Once you begin a debt counseling
program, your counselor will contact your creditors with a plan. Once a
plan has been established, your creditors will halt all collection
activities. The phone will stop ringing, and you will stop getting
notices in the mail.

2. Debt services can work with your creditors to lower your interest
rates and bills.If your counselor secures a lower interest rate for
you, your payment amount will decrease naturally. Sometimes, counseling
services can get creditors to refinance your account so that your
payment can be reduced even further.

3. Once you establish a plan with a debt service, you will only make one
payment a month.Debt services will combine all of your bills together
into one payment amount. You will make the payment on the specified date
directly to the debt service agency. Once they receive payment, they
will distribute the funds to your various creditors.

4. Your counselor will also sit down with you to establish a realistic
budget.They want you to succeed, and they are willing to educate you so
that you will succeed. They will teach you successful financial
strategies and help you set goals. They will help you keep track of your
cash flow and devise strategies with you that will help improve your
financial well being.

5. As a result of everything mentioned above, your counselor will end up
helping you improve your financial standing. Your credit score will
increase and your credit will be cleaned up provided you follow the
program established for you. You will also have more money left over
each month which will provide immediate relief for you and your family.

Debt services do not make debt go away; they help you deal with it. With
the help of a debt agency, you will devise a plan that will help improve
your situation immediately. Over the course of time, your plan will
ultimately reduce and eliminate your debt burden.Many debt services are
also non-profit agencies that charge very little for their services.

Get my famous introductory 20 FREE lessons eCourse about Making Money
that over 179,000 people have studied and applied at:
www.the-richest-man-in-babylon.com.

Many people dream of being debt free. You might also have dreams of one
day being debt free. But do you know when that day is going to happen?
Do you realize that you have complete control over how long it takes you
to become debt free? With a minimal amount of money each month you can
drastically change your timeline for getting rid of your debt burden.

In this article, we are going to look at three main debts that you
probably have: mortgage, auto and credit card. We will figure up how
long it will take you to pay off your debt and devise strategies for
paying off that debt sooner. Let’s get started, shall we?

Mortgage – Your mortgage payment is probably your largest expense. If
you have a $100,000 mortgage at 7 percent, your payment is roughly
around $670 for a 30 year loan. It will take you 360 months to pay off
your mortgage. If you pay an extra $50 every month, you will pay off
your home in 25 years.

If you pay bi-weekly, you will make one extra mortgage payment each
year, which will allow you to pay off your mortgage 6 years earlier. To
find out how your individual numbers play out and how adding more money
affects the length of your loan, use a mortgage calculator. Paying off
your loan early also saves you thousands in interest charges.

Auto – Auto loans work similarly. A $20,000, 5-year auto loan with a 6
percent interest rate will cost you $414 a month. If you pay $503 a
month, you will be able to pay off your car a year earlier. Down
payments, trade allowances and other allowances also affect your
repayment date. It is always best to supply a down payment on large
purchases.

Credit Card – Credit cards are tricky because most people keep making
purchases using their card all the while they are trying to pay it off.
If you want to pay off your credit card, you need to stop using it.
Let’s say you have a $2,000 maxed credit card with an APR of 19 percent.

Your minimum payment would be a little over $51. If you only paid the
minimum balance, it would take you 186 months or 15 ½ years to pay off
your credit card. If you paid $100 each month, you could have your card
paid off in a little over 2 years and save more than $2,000 in interest.

As you can imagine, interest posts a major obstacle when it comes to
becoming debt free. If you can lower your interest rates by as little as
1 percent, you would be amazed at how much money you save and how
quickly you can become debt free. If you’re interested in learning more,
take advantage of online loan calculators. They can help you see the
real picture and create a plan for becoming debt free quicker.

Get my famous introductory 20 FREE lessons eCourse about Making Money
that over 179,000 people have studied and applied at:
www.the-richest-man-in-babylon.com.

When thinking about personal debt, most people think in terms of monthly
payments. They will consider making a large purchase if the monthly
payment seems affordable. Fifty dollars a month might not sound bad on
the showroom floor, but even a small amount can have far reaching
consequences if the debt overextends the debtor.

How about you? Can you afford any more debt? The answer may be as easy
as a simple yes or no. More than 40% of debtors spend more than they
have coming in. How is this possible? Many don’t even realize what they
are spending. They know they don’t have grocery money and that their
bills aren’t getting paid on time.

However, many do not realize that they are steadily falling behind until
it is too late. Before you will know if you can afford more debt, you
need to know how much personal debt you have now. Take out all of your
bills and add them up. Be sure to include utility bills, insurance
payments, groceries, splurges, etc.

Write down everything that you spend and subtract it from your net
income. If you spend more than 60% of your net income, you cannot afford
more debt. If more than 38% of your monthly payments go to creditors,
you cannot afford more debt. Another huge consideration to make is the
economy.

The above numbers are ideal in an ideal economy. Special allowances
should be made for the current state of affairs. Jobs are being lost
every day. People who are able to keep their jobs are making less.
Incomes are actually shrinking in many sectors. You need to be able to
absorb this shrinkage if it happens to you. So, make some economical
concessions.

Try to spend no more than 50% of your net income. Put the extra money
into an easily accessible account. If you lose your income, you will
have something to fall back on. You should also consider your individual
circumstances. How slippery is your financial standing?

If there are talks of layoffs at work, you are not standing on solid
ground. If your home needs major repairs, you should not be buying a new
car. Be reasonable. Consider everything. One extra $50 payment every
month could push you over the edge. Take a good look around you.

How is your life? Most of the time people finance wants instead of
needs. If you want something, save up for it. If you really, really need
it and your financial standing is good, finance it. Remember; keep the
economy at the forefront of your personal debt decisions.

You have to consider more than your own actions before you accept more
debt. You have to realize that there may be circumstances beyond your
control that make it difficult for you to make ends meet.

Get my famous introductory 20 FREE lessons eCourse about Making
Money that over 179,000 people have studied and applied at:
www.the-richest-man-in-babylon.com.

If you truly wish to become financially independent, you need to find a way to increase your income. One of the best ways to increase income is to start your very own business that you can run in your spare time.

Fortunately, the internet makes running a business on a cramped schedule possible. Many online businesses only require 5 to 10 hours a week. Additionally, internet businesses require very little start-up capital.

Before you can start a business, you need to have an idea of what type of business would blend nicely with your lifestyle and financial needs. There are many types of businesses that you can run from your home in your spare time.

Service-based businesses such as consulting, freelancing and administrative services require the most time commitment. Retail businesses require less time, but may require storage space and multiple trips to the post office. Website development requires very little time, but it takes time to start seeing money from these ventures.

Research all of the different types of internet businesses, and select the type of business that works the best for your individual circumstances. Once you have narrowed down the type of business, you will need to find your niche. A niche refers to the focus of your business.

For example: If you wish to start a retail business, your niche may be selling candle-making supplies to crafters. Be sure to select a niche where there is little competition. Try to find something unique. After all, if there are 1,000 other stores online just like yours, you will have to share customers with your competition. If you offer something unique, however, you will easily attract and retain customers looking for your products.

Develop a solid business plan and a list of goals. Research everything you need to know about your business including the legalities. Compile the information and create a workable business plan. Create a list of goals using the business plan, and stay focused. If you need to put in 20 hours a week to get your business off the ground, put in the necessary time. Do not skimp or procrastinate.

Formulate a workable schedule that gives you plenty of downtime. It is not feasible to work a full schedule at work and put in 40 hours at home. If you can only spend 10 hours a week on your business, choose a business that requires very little attention. Of course, you may need to put in some extra time in the beginning to get things moving in the right direction.

Starting an internet business with your spare time is a great way to become financially independent. Often, the money earned from an online business can be invested and used as a platform for more money-making ventures. Online website development businesses can also result in monthly passive income, meaning that your websites will continue to make you money without any effort on your part.

The best and easiest way to reduce or eliminate debt instantly is to take advantage of debt consolidation programs. Such programs can come in the form of loans, second mortgages or debt counseling services. Most people use a combination of programs to solve their debt problems rather than rely on one program to alleviate their entire debt burden.

Before we discuss how to get started, let’s take a moment to look at each type of program in more detail:

* Credit Debt Consolidation Loans – Debt consolidation loans are low-interest loans that can be obtained through most lenders. You must meet certain requirements to qualify including minimum amount of debt, acceptable credit history, acceptable debt to income ratio and adequate capital. If the lender approves the loan, the lender disperses payment to the creditors and holds all freed titles.

* Second Mortgage – Another option is to refinance your mortgage and/or take out a second mortgage. These loans are obtained by using the equity in your home as collateral. The money is paid to you, and you have to pay off your creditors. All titles freed during this method of debt consolidation are yours to keep.

* Debt Counseling – Debt counseling services do not lend you any money. They merely negotiate with your creditors to secure lower rates. Then, they help you set up a realistic budget. You make one payment to your counseling service each month, and they pay your creditors.

Now that you know the different methods of credit debt consolidation, it’s time to get started. You will need to follow the same steps regardless of which method you choose.

* First, you need to gather up all of your bills. You will need all of the contact info for your creditors along with account numbers, balances owed and payment amounts. Do not forget to include anything.

* You will also need to supply proof of income. Be sure to include all forms of income including employment, disability, unemployment, child support, welfare, investment returns, etc.

* It is a good idea to pull your credit report as well. Banks and lenders will pull your credit report themselves, but you will need to supply one if you go the debt counseling route. It is also a good idea to know what is on your report before you begin the consolidation process.

* Research your options and pay special attention to interest rates and deals that are currently available. Right now there are numerous government programs that are making it easier and cheaper for families to consolidate debt.

* Make an appointment to learn more information before you proceed.

Once you have a clear idea of which option you would like to pursue, you need to find out all you can about it. Do not become blindly locked into a course of action. A better alternative may present itself. If it does, do not hesitate to take advantage of it.

Get my famous introductory 20 FREE lessons eCourse about Making Money that over 179,000 people have studied and applied at: www.the-richest-man-in-babylon.com.

Happy New Year to everyone. Here is my latest downloadable book for you to read, use as you wish and share them with your friends as well. Thanks for visiting
Dan

Make Money in 7 days: http://www.trmib.com/pdf/paid2writebk.pdf
Breaking the Debt Cycle: http://www.trmib.com/pdf/two.pdf

Once a person establishes credit by obtaining a credit card, car loan, home loan, bank loan or any other type of credit, they run the risk of taking their new found financial freedom too far. It can be very tempting to make purchases on a new credit card or to obtain even more credit once they see how easy it is to get what they want with their signature.

Retailers don’t help either. They lure customers in with promises of savings and assure them that they have excellent credit by making them a premiere customer. Unfortunately, no one seems to tell them that they are ruining their credit by taking out too much credit until it’s too late.

If you have decent credit, you need to be aware of this trap. You need to know how much is too much, and you need to know how to avoid being buried by too much debt. There are two main things that you should be looking at: your debt to income ratio and your credit debt ratio.

Both of these calculations give lenders a clear picture of your overall financial picture. If you’re numbers are high, it will appear that are overextended and your credit score will take a huge hit.

Let’s take a closer look at these two key components:

* Debt Income Ratio You can calculate your debt to income ratio by comparing your gross monthly pay with your monthly bills. Remember, only debt applies here. You do not need to figure in utility bills, insurance payments, etc. You only need to include the bills that you owe to creditors. Your ratio should be less than 36%. If your numbers are higher than this, you need to work aggressively to pay off some bills.

* Credit Debt Ratio Your credit debt ratio is a bit different. You calculate this number by adding up the total amount of credit extended to you and comparing it with the amount of credit that you have used. For example: If you have a credit card with a $2,000 limit but have only spent $250, you would compare these numbers. Your debt should not exceed 25% of the amount extended to you on revolving accounts.

As mentioned before, these numbers show lenders how well you are doing financially. As these numbers rise, your credit score goes down. You will still be able to qualify for credit however, your interest rates will be higher.

You see, lenders calculate your interest rate based on how much of a risk they think you are. If your debt to income ratio is 50% or more, it raises the likelihood that you will default or declare bankruptcy.

Keeping these numbers down is vital. You will enjoy lower interest rates when you do borrow money, and you will always know that you will be able to pay your bills every month.

Get my famous introductory 20 FREE lessons eCourse about Making Money that over 179,000 people have studied and applied at: www.the-richest-man-in-babylon.com.

If you owe a lot of people a lot of money, you may feel like you are never going to be able to become debt free. Even if you pay all of your bills on time every month, the balances just don’t seem to go down, do they? And if you get behind just a little bit, late charges and interest charges can quickly reverse any headway that you have made.

Fortunately, there is a plan for becoming debt free. You don’t have to have a lot of money to make it happen either. You can become debt free regardless of your financial situation or income level. Here’s how:

1. The first thing that you need to eliminate is credit spending. Put your credit cards away. Don’t just move them to the back of your wallet; freeze them in a block of ice or put them in a safety deposit box. Put them anywhere that you will not use them. Do not purchase anything on credit. Yes, you may have to do without for a little while, but you really need to eliminate all credit spending.

2. Pull your credit report and study it. Figure up how much you owe and who you owe it too. Pay special attention to accounts that have defaulted or placed in collection. Write down the dates of last activity for each account, and make a list of your bad debt with the newest defaulted debt at the top of your list and the oldest at the bottom.

3. Continue to make all of your payments that you have been making every month. You do not want to start making these payments late as it will further affect your credit score. Start paying off your bad debt one account at a time starting with the first account on your list. Negative accounts lose power over time. Newly defaulted accounts hurt your credit rating more than old accounts. After seven years, defaulted accounts fall off your report regardless if you paid on them or not.

If you cannot spare any extra money for your debt free strategy, you will have to get creative. Think of ways that you can make extra money or save extra money. You might be able to sell some unwanted items on eBay or you might be able to turn off your cable for a little while. The goal is to free up some cash that can be put toward your debt repayment plan. If you can’t afford much, don’t worry. It only takes a little bit of money each month to make a huge difference.

Living in debt is stressful. If you want to be debt free, you have to break the cycle of credit spending. Once you have learned to live differently, you can clean up your credit report by paying off old bills. Once you are debt free, you will be able to live comfortably and breathe easily.

Get MY famous introductory 20 FREE lessons eCourse about Making Money that over 179,000 people have studied and applied at: www.the-richest-man-in-babylon.com.

You may already know that you carry too much debt, but do you know how to get rid of it? If you had disposable income left over each week, it would be simple. But if you’re like most people, you live paycheck to paycheck, and it takes every penny you earn just to pay the bills. Without any money left over, it can seem impossible to dig out from under your financial problems. But it is possible.

Debt reduction is possible if you make a few changes. In an ideal world, debt could be reduced immediately with a second mortgage or debt consolidation loan. If these avenues have been shut off to you, you need a real plan…a plan that you can execute yourself. Fortunately, there is such a plan, and all it requires is dedication, motivation and a little bit of your time and effort. Take a look at the following step-by-step plan:

1. Find hidden sources of cash – Hidden sources of cash include any and all ideas that will earn you extra money. Have a yard sale; sell some stuff on eBay; and take a second job…anything that earns you money. Put all the money that you earn into a separate account. You will need it later.

2. Save money wherever you can – Cut out all unnecessary expenses. If you can turn off your cable for a bit, do so. Cancel membership subscriptions. Stop eating out. Stop going out. Save, save, save! Again, put the money saved in a separate account.

3. Lower your interest rates – Call your creditors and ask for lower interest rates. Combine credit cards together if at all possible. If you have two accounts held by one lender, ask the lender to combine the accounts and lower the interest rate. All of this will lower the amount of money that you have to pay out each month thus freeing up some cash. Put free cash into separate account.

4. Debt reduction 101 – Now that you have money put back into a separate account and money being put into the account each month, it is time to reduce your debt. First, take the bill that has the highest interest rate. Put all of the money that you have left over each month toward the principle balance of this bill. Keep paying all of your other bills on time, but concentrate on one bill to pay off quickly. Once the bill is paid in full, move onto the next one.

Whatever you do, do not purchase anything on credit during this debt reduction period. The goal is to get everything paid off. Paying more than your minimum payment each month will help you pay off your debt quicker and avoid needless, expensive interest charges. Saving money on interest charges equals more money that you can put back to pay off your debt burden. As you can see, a few small changes really add up.

Get my famous introductory 20 FREE lessons eCourse about Making Money that over 179,000 people have studied and applied at: www.the-richest-man-in-babylon.com.

Nearly 45% of families spend more than they earn. Average credit card debt is around $8,000 per household. The average combined debt of households is a staggering $85,000. Numbers like these are hard to swallow when they are on paper.

How do you think families are surviving when such numbers are their reality? The truth is that they are living on a slippery slope that can only end up in foreclosure and financial ruin.

If you are the average person, your financial debt numbers probably look like the ones mentioned above. Of course, your numbers could be a little more or a little less. Regardless, you might feel like your level of debt is bearable.

Unfortunately, such thinking could lead to your demise financially speaking. Before you get all rosy and comfortable with your level of debt, let’s take a moment to see where you should be as far as debt is concerned:

* Savings – Let’s start with savings. You should be saving at least 25% of your net income, 40% is better. And when I say save, I mean save for the long term. You should have an easily accessible fund worth at least three months of income. In this economy, 12 months income is more secure. You should also be putting back money each week toward long term savings plans such as retirement, education, investments, etc. If you cannot spare this much for savings, you have too much debt.

* Housing – Your housing costs should not exceed 30% of your take home pay. Housing costs include mortgage/rent, insurance and taxes. You should also calculate repairs and maintenance into this figure. If you’re paying too much for housing, you need less house. Refinancing your home may make your house more affordable. If this is not an option, you may want to think about downgrading.

* Budget – Your entire budget including all of your bills, groceries and expenses should not exceed 60% of your take home pay. Think about this: After you pay for housing costs, utilities and groceries, there will probably not be much left over for bill expenses such as credit card payments, auto payments, gym memberships, etc. In order to get expenses under control, you will have to think long and hard about what to keep and what to eliminate.

The 60/40 financial debt model is not impossible to attain. All it takes is dedication, close monitoring and a few lifestyle changes. Once you get used to living within your means, you will find that such a financial model allows you to have more freedom.

You will not be worried about debt, and it will seem like you have more money than you do now. The hardest part is getting started. You have to let go of your old ways of thinking. Stop using debt to finance your life. Adopt a saving strategy instead.

Get my famous introductory 20 FREE lessons eCourse about Making Money that over 179,000 people have studied and applied at: www.the-richest-man-in-babylon.com.