Are You Having Difficulty
Meeting Your Financial Obligations |
By Jeff Dragt |
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Many individuals are experiencing difficulties meeting their
financial obligations from month to month and the monthly
payments are overwhelming and creating unnecessary stress and
frustration. However, it is imperative that you find a way to
meet your monthly obligations in order to maintain a positive
credit rating and eliminate problems with credit collectors and
losing your good credit standing. Of course, when you find
yourself in this situation you have several options from
managing your debt yourself to debt consolidation loans or debt
consolidation services. However, before you take the route of
applying for a loan or debt consolidation help there are a few
things you should do.
First and foremost you need to sit
down with your bills, your monthly income, and a calculator. Run
the numbers and see how much money you have coming in and how
much money is going out. If your bills outweigh your income then
you may need outside help. However, you are most likely in the
same boat as most and have enough income to meet your
obligations but are spending money in places you don't realize
which causes financial hardship. For example, if you earn $2500
per month after taxes and your rent or mortgage is $800, your
car $350, power $120, credit cards $200, groceries $300 and
gasoline $200 then you are spending $1970 each month. Of course,
you may have other expenses that need to be included like
childcare, cable TV and Internet, and the like or you may have
less expenses. The point is to sit down and evaluate exactly how
much money you have coming in and going out and to pinpoint
exactly where money is being spent.
If you buy a flavored
coffee every day on your way to work then you are basically
spending an extra $100 per month on coffee that could easily be
redirected to your monthly bills. Or, perhaps you like to eat
out for every meal. Stop this and you will save significantly as
well. Always make a list of things you need when you go to the
grocery store and clip coupons. This will likely save you
$50-$100 per month as well. Another tip is to save on
electricity bills by keeping the thermostat at a conservative
temperature. If it is too hot then open some windows, if it is
too cold then put an extra comforter on the bed.
As far
as gas expenditures go you can always car pool and save a lot of
money by doing this. If your mortgage/rent or car payment is too
expensive and you can't seem to make the payments then consider
refinancing, or downgrading to a smaller home or less expensive
car. All of these options will help you save a significant
amount of money in a hurry as well as help you eliminate your
debt by meeting your monthly obligations. However, if you find
yourself with your monthly bills significantly outweighing your
monthly income then there are options. You may consider a
consolidation loan or else you might prefer to use the services
of debt consolidation services or credit counselors.
A
debt consolidation loan will help you because you can receive
the loan and immediately pay off all of your monthly
obligations. Of course, you will still have to make a monthly
payment for the debt consolidation loan although it should be
considerably lower than the sum of all of the other debts you
were paying. The major benefit of this option is you decrease
your stress and anxiety of feeling gobbled up by debt by taking
care of all of your obligations and leaving only one monthly
payment. However, the drawbacks are that you must have good
credit to qualify for one of these loans; you may risk losing
your home if you cannot pay your monthly mortgage, and you may
become overextended again because you have a false sense of
security that your debt is taken care of. Before choosing this
option be sure you are fully educated on the benefits and
drawbacks and any risks you may experience because of it.
Another option available to you when you cannot meet your
monthly obligations includes using debt consolidation services
or else credit counseling services. These services have
considerable benefits because they allow you to immediately
reduce your monthly payments which results in some serious
financial relief for you. Also, these services frequently are
able to obtain lower interest rates and fees associated with
your credit accounts as well, which is realized in a smaller
amount of debt you are required to pay. The drawback to debt
consolidation services is only about 33% of people actually
qualify for these services. Another drawback is you are not able
to use your credit while you are working with a debt
consolidation agency and your credit rating may be negatively
impacted as well.
When faced with a credit situation
where you are completely over your head and feel as if you have
nowhere to turn then you should consider a debt consolidation
loan or debt consolidation services. You may or may not qualify
for these services, but if you do it is a great way to help you
pay off your debts immediately and realize relief while
restructuring your debt and disciplining yourself to pay it off.
Of course, these options should only be considered once you have
evaluated your true financial standing by evaluating your income
and monthly bills. Most likely you will be able to manage your
bills on your own with some good old fashioned discipline and
budgeting and simply cutting back and avoiding those consumer
items that are simply unnecessary. You should not live beyond
your means and definitely should not seek a debt consolidation
loan or use debt consolidation services to help you do so. |
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