Debt Management: A Program for Beginners

These days, everyone is struggling with bills. With unemployment at its highest level in years, many are wondering if there is really a light at the end of the tunnel. Debt management has become one of those phrases that is carelessly thrown around, even though it should be something that is seriously considered on your path to becoming debt-free.

With so many people behind on their payments, your creditors are well aware that you might also need some time and assistance with paying off your existing balances. Yet, what most people don't know is that, more often than not, your creditors are willing to help you create an affordable payment schedule that meshes with your own debt management program.

If you're searching for ways to regain control, eliminate debt, and achieve financial freedom, use the following tips and hints to dig yourself out of that growing hole of bills!

Eliminate Debt Now

There are multiple ways to regain control in this situation. The most ideal way for the average person to eliminate debt and achieve financial freedom is to create a debt management program they can live by. Ask yourself:

• By what point in time should/can my debts be paid off? Is this deadline realistic?
• How will I reach the deadlines outlined in my debt management program?
• What are some ways I am cutting back on my monthly spending? If I'm not, what can I cut out to eliminate the debt I owe? (Consider extraneous costs, such as dining out, cable with 800 channels, or expensive haircuts.)
• Have I informed my creditors of my situation?
• What steps am I taking to guarantee that I meet their payment schedules?
• What steps will I take to ensure this doesn't happen in the future?

These are all very valid questions to keep in mind when creating a debt management program, and they will help you identify the key areas of concern. Sit down and have attainable goals in mind. Do not make reaching your goals too lofty as they most likely will not be achieved. There are a few ways to get started:

• Acquire a copy of your credit report. Read through it carefully, ensuring there are no errors. If there are, make sure you contact either the creditor or the credit reporting agency, depending upon the error.
• Do not use your credit cards! Take them out of your wallet and leave them at home. Do not cancel the account however. This action can end up harming your credit score even further.
• Consult your creditors one-on-one, and attempt to negotiate a payment plan that works for both of you.
• Create a monthly budget outline, noting when certain bills are due each month.
• Effectively eliminate your debt by paying off smaller debts first and working your way up to the larger ones.

Achieve Financial Freedom Once and for All

In order to live debt-free, you must, of course, make more than you spend. Write out your budget, and keep to it. Seeing where your cash goes on a monthly basis will illustrate the parts of your budget that can be trimmed down or even eliminated for the time being. This meticulous planning will not only save you time, but, most importantly, money!

However, do keep in mind that, in cases of extreme debt, you may need to work with a debt counseling agency in order to plan out a debt management program that works. Here are some things to consider if you use this service:

• Ask questions and use the counselor's offers for credit assistance much as you would any resource. Your counselor is there to provide guidance and help you create a realistic debt management program.
• If offered a loan or loan consolidation to eliminate your debt, make sure that you can pay/afford the monthly payment. Thoroughly research the interest rates, fees, and terms of the loan, and don't settle.
• Evaluate the cost of the debt management program - is it really beneficial to pursue a service that helps you eliminate debt and achieve financial freedom by charging you high fees to do so?

Establishing Your Financial Future

Your own knowledge and planning skills can help you eliminate your debt and achieve financial freedom. You have the ability to stop the daily back-and-forth with creditors, and dig yourself out of a growing hole with a carefully crafted debt management program. Just don't rely on others to help you tackle your bills!

Change most assuredly won't happen overnight. You must be dedicated to paying your creditors until you eliminate your debt, resolve the situation, and appease all parties. Sure, it won't be an easy path, but it's a necessary one for both your financial future and personal responsibility.