The total American consumer debt reached $2.4 trillion in 2006.
There are literally hundreds of ways to eliminate your debt. You can't turn on the TV, listen to the radio, open a newspaper or click on a web page link without hearing or seeing the latest miracle method to get you out of debt.
Some of these methods can actually be very effective. For
example, a debt consolidation loan using the equity in your
home can significantly reduce the interest you pay each month.
Others like debt settlement or debt negotiations can have a
negative impact on your credit rating. Some companies promise to help you rebuild your credit rating after settlement but this is a slow process no matter whether they do it or you do it yourself. This method, along with bankruptcy should only be considered if all other options fail.
Before you consider any option to eliminate your debt you need
to find out why you are considering this in the first place.
Simply obtaining a loan or settling your debt is not going to
solve the problem for most people.
The odds are good that once you have your debt under control
you will start piling it on again. This is because most people
take these actions without a plan to prevent this from happening again.
Another important point that you should consider is that for some
there is no need to go through a 3rd party for help with your
debt. It's very possible that you have all the money you need
to pay your debts and other expenses and have the ability to
impact the interest rates you pay.
I'm not just talking about a budget but a real plan for what you
want your money to do for you. A budget is just part of the
process. A real financial plan starts with setting your long
and short term goals and working backwards from there. Every
financial decision you make should be directed toward achieving
your goals.
Your budget will simply be a tool to show you what you have and
what your obligations are. Most importantly, it will put you in
control of your finances so that you can make educated decisions
regarding your spending and savings.
There is absolutely nothing wrong with consolidating your debt to
get out from under those high interest rate credit cards. But if
you are not careful you may end up with the consolidation loan
payment and even more credit card debt.
If you are dead set on using one of the debt elimination methods
to reduce your payments, take the time to consider what you are
going to do differently in the future to make sure you don't
wind up in the same situation, or worse in a year or so.
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The other stocking threads inspired me to ask you ladies. I'm rather stumped on how to do this inexpensively. I've adopted several families this year for Christmas and need some suggestions on what to put in a 1 yr old girl, 2 yr old boy and 3 yr old boy's stockings.
