Discover Debt Freedom!

The best advice when it comes to debt management is to avoid getting debt into the first place, but most people don’t learn the dangers of having a large amount of consumer debt until they’re in debt up to their eye balls. A recent survey showed that the average adult in the United Kingdom has a personal debt of 30,000 GBP or more. With the economic hardship Britain has faced during the last few years, consumers are having an increasingly difficult time dealing with the debts that they have.

If you have issues with debt, don’t panic. You shouldn’t ignore the problem either. If you are struggling with debt it may seems impossible to manage.  However, we will offer simple guidelines, following which you should be able to get your life back on track.

•             Work out your personal budget, analyzing where your money goes.

•             Find out how you can cut out your expenditures. Be realistic.

•             Sort out how big is your debt.

•             Prioritize any urgent debts (such as utility bills and rent).

•             Find out if you can pay your debts off, if so, how much.

•             If you are unable to pay your debts off with your current income, find out if you can increase your income.( You may want to think about renting out a spare room in your house or applying for the benefits you`re entitled to)

If you worked out all possible options and are still unable to pay your debts off, you can get free and independent debt advice from organizations like Citizens Advice or National Debtline (the list of those and similar organizations is given in the end of the article).  You can get help either online, by telephone or face to face.  Trained advisors will discuss your circumstances with you and offer the best solution.

If your IVA debt is between £3,000 and £15,000 you may want to consider Debt Management Plan (also known as DMP) – an agreement between you and your creditor to make monthly payment. It can be managed by yourself or by a third party (DMP `operator`) which can negotiate with your creditors on your behalf.  If you have surplus income (£200+ after essential living expenses) you will make one monthly payment, which then will be distributed between your creditors.  Most companies will charge for this service, but there are some organizations like National Debtline or Consumer CreditCounseling Service which will do it free of charge.

If you have a debt over £15, 000 you may want to consider Individual Voluntary Agreement.    This solution offers you an ability to pay off one portion of your debts and write off the debts you cannot afford to pay.  If you go for IVA your interest fees and debts will be frozen.

Options like Administration Orders, Informal Arrangements, Consolidating Debts are also available among others.  There are many ways of resolving debt problem and it is often confusing to choose between them. The best way is to use free and independent advice available to you through various organizations all over the UK.  Don`t neglect this opportunity and sort out your debt problems now.

One in four adults have a credit report with a serious error.  The three biggest credit bureaus process large amounts of information daily and studies have found that 25 percent of the credit reports surveyed had errors that were serious enough to cause the denial of credit.  Usually, consumers do not find out about errors in their credit reports until after they’re denied credit.

To fix mistakes in your credit report, here’s what to do:

Prepare For Battle

Get into the proper frame of mind to battle this in the courts.  Everything you do should be done with the goal of impressing a judge and jury if the problem gets that far.  You never know what it will take to clear up your credit record. In some cases, a couple of phone calls will do, but some cases end up in a multi-year ordeals ending in federal court. Your credit report is your financial reputation, and there’s nothing wrong with going to court to clear up any issues.  Act as if your first effort to correct an inaccuracy is the first shot in a legal war, document everything as it happens, and always act businesslike.

Keep Detailed Records

Even if you don’t take this matter to court, you can use your  record-keeping as a weapon.  If you can show that you wrote your records as events occurred, they will be considered more trustworthy.  Keep track of everything in a phone log, a daybook, or a diary.  It doesn’t stop inaccurate credit reporting, but it’s allowed in court because it’s a record that’s taken at the time things are happening.

Be Businesslike

Resist any temptation to scream, yell, curse, or do things that would not look good in court.  You don’t want your opponent to testify that you were belligerent. Don’t refuse to give information, such as account or Social Security number, to someone who is trying to correct your credit record. Never threaten to file a lawsuit unless you intend to follow through.  You never know if your problem is going to become so intractable that you have to file a lawsuit, so everything you do has to look good to a judge and jury.

Mail Everything

Consumer protection laws require you to notify credit bureaus in writing of any inaccuracies they report.  Send the creditor a certified letter disputing the inaccuracies and send a copy to the credit bureau, with any pertinent documents to prove that it’s inaccurate. For telephone conversations, back up each conversation with a certified letter summarizing the call, then send it to the person you talked to and send a copy to the credit bureau.  Ask for the first and last name of the person you’re talking to, the name of the supervisor, and find out the name of the department.  If you file a lawsuit, your copious information will help you establish your case.

No, the web is not going to solve your debt problems for you. But it does provide invaluable resources and avenues when it comes to plotting a course back to black. Virtually everyone is connected to the Internet these days, but are you really using it’s limitless level of information and access to the fullest? If you’re web-savvy but struggling with debt, then the answer is no.

Taxes – you hate paying them. You look around and wonder where all that money goes. Have you looked online? The United States government offers a wide variety of resources when it comes to managing debt and solving long-term financial planning problems.

For instance, the Federal Reserve’s website features a simple credit card repayment calculator. The Department of Labor has an entire e-book devoted to helping people solve the mysteries of retirement planning. The newly created Consumer Financial Protection Bureau will help you find ways to pay your mortgage, as well as provide a means for you to complain about credit card company behavior. You say the government never does anything with your money, so put it to use yourself by accessing these free services.

Going back to school – the Internet can certainly help. Those apprehensive about online education can incorporate it with a traditional learning experience. For instance, the University of Phoenix in San Diego allows Californians nearby to take advantage of online classes, yet with traditional campus instruction still mixed in. The costs of a campus UOP education won’t necessarily equate to major savings, yet the time it takes to get a degree can be reduced when utilizing the easy access of online courses. Time is money; the quicker you get a degree the quicker you’ll get a better job and higher salary.

These are just two direct examples of online debt help. The list goes on and on. In fact, what you’re reading right now is a sliver of the true amount of debt-free assistance available online. Much of what is out there consists of modest advice such as this, yet beyond that lies scores of financial knowledge that is just waiting to get absorbed by your brain. You might experience a life-changing personal debt realization just by reading the Wikipedia article on the national debt. An academic research paper you come across may include data that finally puts the price of reckless financial living in perspective.

The web isn’t just for social networking and avoiding having to buy a newspaper. It’s a portal to a level of personal comprehension that was previously only won through natural aptitude or years of dedicated research. Nowadays Google can help you find just about anything. Start by scouring the web to look for ways you can use technology to take care of your debt once and for all.

With the recent downturn in the economy, it can seem as if improving your financial situation and meeting your financial goals are impossible tasks.  Many people now claim debt reduction as their most pressing financial goal and many of these individuals are $10,000 or more in debt.  Other important financial goals reported include saving more money, increasing credit scores, and limiting reliance on credit cards.  Improving your financial health and meeting your financial goals will take time and dedication, but following these simple tips may make your task easier.

Review Your Worth

It is impossible to know how you are doing financially if you do not know your net worth.  Your net worth is the total value of all your assets minus the total value of all of your debts.  If your debt exceeds the value of your assets, then you are in a very precarious financial situation that will need to be remedied as quickly as you possibly can.  The goal should be to grow your net worth each year and carefully limit the amount of debt you carry.

Set Specific Financial Goals

Experts have found that it is much easier for individuals to save and limit their spending when they have concrete financial goals to aim for.  Success is more likely to occur when a particular problem is identified and the steps to necessary to rectify the problem are put into practice.  The financial goals can be short term or require years of preparation, as merely having concrete goals will increase your chances of success.  Many people aim for several financial goals simultaneously but trying to accomplish too many goals at once can lead to discouragement.

Make Bill Paying And Saving Automatic

There are many different ways to automate the practices of paying your monthly bills and transferring money into your savings account.  Many large banks allow their customers to set up automatic bill payments or transfers from checking to savings online using their secure website.  Automating your bill payments can help you avoid late fees, a decrease in your credit score, or cancellation of services.  Automating your savings account transfers will help the balance of your savings account grow quickly with a minimal amount of effort.

If you are interested in saving 20% or more of your money, use a flexible spending account.  Every time you make a purchase that can be classified as medical, such as prescription eyeglasses, doctor or pharmacy co-pays, or over the counter medication, you could be saving a significant amount of money.  Here are some tips on the best ways to use a flexible spending account.

A flexible spending account allows you to use pre-tax money to pay for medical expenses that are not covered by your health insurance.  The flexible spending account can be used for a wide variety of expenses, including insurance deductibles, medications, and birth control, which are not paid for by some other health plan.  By using pre-tax money for these items, you will save a lot of money in taxes to Uncle Sam.

It is estimated that 35 million Americans use flexible spending accounts to save money on their healthcare expenses.  Federally, there is no limit to the amount that can be placed into a flexible spending account but many of the companies that administer the plans cap the amount at $5,000 annually.  The accounts are funded by diverting a portion of your paycheck directly into the flexible spending account, like funding a 401(k) account.  The amount that is placed in the account during each pay period for the benefit year is determined by the account holder during the benefit enrollment period each year.

There are several different ways to access the money in the flexible spending account.  For some accounts, the user is issued a debit card that can be used to access the money in the account for eligible expenses.  Other types of accounts require the account holder to pay for the eligible items out of pocket and then file for reimbursement from the company managing the accounts.  Because most flexible spending accounts are obtained through an employer, the individual may have little control over which types of flexible spending accounts are available to them.

It is important to make sure your flexible spending account is not over-funded because all of the money that is left in the account at the end of the plan period is forfeited, which means that you will not get the unused portion back.  If you have a lot of money left in the plan at the end of the year, be sure to try to use up the allotted amount before the end of the grace period.  This would be a good time to purchase an extra pair of glasses or stock up on the medications that you know you will need during the coming year.  When a flexible spending account is used correctly, it is a great way to save 20% on money you were going to spend anyway.

Credit cards – love ‘em or hate ‘em they’re here to stay and most Americans rely on them for one reason or another.

But what are the hidden risks associated with credit cards that can hit the holders in their pocket without realizing?

After the recession sent many lenders into hibernation, unwilling to extend credit to anyone but those with an unblemished credit record, many are now back on the market and offering tempting deals to win new customers.

Whilst this is great news and can mean that there are many bargains waiting to be snapped up, lenders can be somewhat sneaky with their marketing techniques.

Companies know that when customers compare credit cards, they look at the interest rate advertised and will apply to the lender with the most competitive rate.

Therefore, lenders quote their cheapest rate in any campaign, knowing that this rate will not be offered to many people that apply for their card. Those that do not have a high enough credit score will automatically be given a card with a much higher rate of interest, which more often than not is hidden in the small print.

Many people with a credit card may also believe that it is only their credit score when they took the card out which matters, but thanks to the universal default law, this is not the case.

If a credit score drops after a card has been issued, the lender can opt to up the interest rate without getting the cardholder’s approval. The one bit of good news is that they can only apply the higher charges to new balances.

Everyone knows that lenders love charges and pretty much whack on a fee for any kind of misdemeanour, with late payment fees and bounced direct debit penalties usually ridiculously high.

However, what most people do not know is that if they do not use their credit card for a period of time, some lenders charge an ‘inactivity fee’, which can be as much as $15 for failing to use the card for typically between 3-6 months.

For credit cards that have varying interest rates applicable, either due to promotional offers or using the card for cash advances (always a bad idea!), the lender will decide how to allocate your money.

In most cases, the lender will pay off the debts that will earn it the least amount of cash first, such as the lower interest purchases, leaving the higher interest items untouched to accumulate more charges.

Of course, credit cards are not all bad and whilst some of these practices are shocking, they should all be contained in the terms and conditions. So boring although it may be to wade through the small print, ignore it at your peril.

The best way to manage a credit card is by understanding the charges that apply and having the right kind of card for your needs. Do you pay off the entire balance each month? If so, don’t worry about the interest rate and get a reward card so you make gains on your spending.

Do you tend to repay your purchases over several months? If yes, then scrap the rewards and head for the card offering the lowest interest – rewards will always be lower in value than the interest charged.

There are alternatives to credit cards and one of most popular options is the prepaid card. This works exactly like a credit card but is preloaded with cash from your own bank account so you cannot overspend. These can particularly useful for trips overseas as they typically have lower charges and many offer a more competitive exchange rate.

Most people asked about their financial goals answer with general goals, such as achieving financial security, because many of us have not thought about which financial objectives matter the most to us.  Instead, we spend to meet day-to-day expenses that dominate our attention, leaving the most important objectives unidentified and unfulfilled.  Identifying the financial goals that matter the most to you and making a plan to ensure that they are fulfilled are very important for financial stability.

Financial goals continually collide with one another.  That is why you must decide which goals will take priority and work toward the lesser goals only after the important ones are provided for.  To get started, make a list of all the things that you would need to feel secure, happy or fulfilled.  Once you have your list created, you need to decide which of the many possible financial goals are really worth pursuing and start working toward them.  You will not be able to achieve every financial goal, so identify each goal clearly and why it matters to you, and decide which ones are most important to have a better chance of achieving what matters the most to you.

In creating your financial goal list, you should focus on things that help you feel financially secure or fulfilled, like building an emergency fund, getting out of debt, or saving for your children’s tuitions.  Rank the items in order of importance.  If you have a spouse or significant other, make sure they are part of the goal creation and ranking process. Children should also have some say in the goals that affect them and their happiness.

The most important ally you have in reaching your goals is time.  Take advantage of the power of compounding – the fact that even a small amount of money can earn interest and each year the interest is applied to a growing sum of money.  Money stashed in interest-earning savings accounts or invested in stocks and bonds grows and compounds.  To put the power of compounding on your side, you have to start early.  The more time you have, the more chance you have of success.

The longer you wait to identify and begin working toward your goals, the more difficulty you will have reaching them, so you should start quickly.  Once you have prioritized your list of goals, keep your spending on course. If a big expense does not get you closer to your goals, try to defer or reduce it.  Although this encourages you to focus on long-range plans, most of what you spend will continue to be for daily expenses, which is acceptable long as your long-range needs are taken into consideration.

The use of debit cards has increased dramatically over the last decade, resulting in a dramatic increase in the number of cases of debit card fraud reported each year.  As companies try to combat the techniques that scammers are using to obtain debit card information, the best thing for individual consumers to do is to take some preventative steps to avoid becoming a victim of debit fraud.  The techniques used to obtain debit card information for fraudulent usage evolve constantly, but following these simple rules will reduce your risk of becoming one of the victims.

Check Your Statements Regularly

Most banking institutions limit the liability of the account holder when the debit card linked to the account is used fraudulently, but only if the bank is notified within the time period specified within the terms and conditions of the account.  If the bank is notified of the problem quickly, the account holder’s liability can be as little as $50.  If notification is received within 60 days of the incident, the account holder’s liability may be as much as $500.  To limit your liability for fraudulent use of your debit card, you should check your statements on a regular basis to ensure that all of the transactions displayed are transactions you initiated and inform your bank immediately if questionable transactions are found.

Conduct All Online Financial Transactions From Home

Many criminals interested in obtaining debit card information for fraudulent purposes are able to steal the information over unsecured computer networks or can install programs on a computer that will log debit card numbers and other financial information that is typed into the computer.  Using your home computer for online financial transactions is best because you can ensure that the amount of security on the computer is adequate to keep your financial information secure and that no programs to surreptitiously steal your financial information has been installed on the computer.

Make Sure Your Contact Information Is Up To Date

Many banking institutions have procedures put into place where a representative with the bank will contact you if they notice that something out of the ordinary is occurring with your account.  If they do not have up to date information to contact you, you may miss important communications about activity on your account.  As soon as any of your contact information changes, notify any banking institutions holding your financial accounts as soon as you possibly can.

By now, everyone has been affected by the mortgage crisis in some way.  Many of the foreclosures were the result of taking out an exotic mortgage loan to finance a house that was unaffordable.  During the buying frenzy, many chose adjustable, teaser rate loans in the belief that they would be able to find a buyer to purchase the home for more than they had paid for it before the interest rate reset to a higher rate.  When the bubble collapsed, many found themselves stuck in impossible loans.  If you are in the market to purchase a house today, there are some rules of thumb that you should follow to make sure that you do not find yourself facing a financial disaster down the road.

30 Year Fixed Is Often Best Option

Many of the people in trouble with their mortgages today chose adjustable rate loans to purchase a larger house with less money down and lower initial monthly payments.  If the mortgage payments at the 30 year fixed rate for the loan are unaffordable, then you should not be purchasing that particular home because the price of the home will become an economic hardship for you.  A 30 year fixed rate loan is considered one of the best mortgage deals available for mortgage loans, so this is the type of loan you should be pursuing. There a number of sites which offer instant decision loans which can be found by way of a simple Google Search.

Do Not Plan To Leave For At Least 7 Years

Owning your home is an attractive prospect, but purchasing a home to live in for a short period of time can be an astounding waste of money.  If you are not planning on being in the home for at least 7 years, then the fees that you have paid for the purchase of the home and the fees that you will pay for selling the home and for paying off the mortgage loan early will erase any monetary gains that you have made while staying in the home.  Add in the cost of repainting and repairing everything that is needed to get the home ready for sale and you may be losing money by moving out of the home within a short period of time.

Review All Fees And Charges

As many foreclosures and personal bankruptcies work their way through the court system, people are finding that the fees charged for their mortgage loan were well above what they should have been paying.  Some brokers were adding additional fees into the loans as vague entries in the hopes that the person signing for the loan would not notice.  Make sure that you know about each of the fees that are being charged for the mortgage loan and what they are for.  If you do not know what a fee is for or why it is the amount that it is, do not sign the documents until all of your questions have been satisfied.

Everyone could use a little more money these days and most people have items in their home that they no longer want.  Instead of allowing these items to clutter up your home or paying to use a storage unit, you can turn these unwanted items into cash that you can spend on items that you need or save the money for future emergencies.  Different types of items can be traded in for money using different methods and here are some of the methods typically used today.

Word Of Mouth

If you would like to sell an item that is large, is fragile, or would be difficult to ship, a good solution would be to ask friends or family members if they would like to purchase the item or if they know anyone that would like to buy the item from you.  With the numerous ways to contact individuals these days, it will only be a matter of time before word reaches someone that is interested in purchasing the item.

Social Networks

The rise of social networks has given people a way to contact a large number of other individuals very quickly.  Asking your entire network of friends whether they would like to purchase a particular item that you would like to sell takes a very short amount of time and will not cost you anything.  Even if your friends are not interested in your items, they may know someone who will be or may be willing to repost the information for their network of friends to view.

Garage Sales

One of the most common ways to turn unwanted items into cash is to sell the items at a garage sale.  Garage sales are the most successful when they are easy to find and easily accessible.  Some neighborhoods choose to hold community garage sales, allowing many members of the community to sell their unwanted items at a central location that is easily accessible and can handle large amounts of foot traffic.  Some cities require the registration of garage sales within the city limits and some cities require a specific permit based on the size of the garage sale, so it is best to review local regulations before deciding to hold a garage sale on your property.