10 TIPS TO
GET OUT OF CONSUMER DEBT USING THE
M.A.N.A.G.E. D.E.B.T. SYSTEM
GET OUT OF CONSUMER DEBT USING THE
M.A.N.A.G.E. D.E.B.T. SYSTEM
British and
American household debt had reached record levels, despite high employment, low
taxes and historically low interest rates.
American household debt had reached record levels, despite high employment, low
taxes and historically low interest rates.
In the UK, the
TUC has called for higher pay rises to solve the problem, but we know that is
not always the answer. If you cannot manage small amounts of money, chances are
you will not manage larger sums. Unless you change your habits, that par rise
or bonus will be blown on more stuff or another holiday before you even receive
it.
TUC has called for higher pay rises to solve the problem, but we know that is
not always the answer. If you cannot manage small amounts of money, chances are
you will not manage larger sums. Unless you change your habits, that par rise
or bonus will be blown on more stuff or another holiday before you even receive
it.
I cover more
on managing money in my book on money, but in the meantime, here is THE
M.A.N.A.G.E. D.E.B.T. SYSTEM – 10 TIPS TO GET OUT OF CONSUMER DEBT
FOR GOOD:
on managing money in my book on money, but in the meantime, here is THE
M.A.N.A.G.E. D.E.B.T. SYSTEM – 10 TIPS TO GET OUT OF CONSUMER DEBT
FOR GOOD:
·
M
- MAKE A LIST and prioritise
debts in order of importance and cost of servicing the debt. Obvious priorities
are things like keeping a roof over your head and maintaining power supplies,
rather than paying those who are shouting the loudest. Look at the cost of your
loans or credit cards and clear the debts with the highest interest rate or
repayment. Clearing the high cost debts first will give you breathing space to
pay off other debts faster by saving money on interest. Make a plan to start
paying off debts and stick to it. Start clearing expensive debts, like credit
cards or worse still payday loans, first so that you can reduce the rising tide
of compound interest drowning you by increasing your balance faster than you
can clear it. List all debts and monthly repayments on a spreadsheet and plan
your route to financial freedom. This one step of making a list of your debts
will make a huge difference.
M
- MAKE A LIST and prioritise
debts in order of importance and cost of servicing the debt. Obvious priorities
are things like keeping a roof over your head and maintaining power supplies,
rather than paying those who are shouting the loudest. Look at the cost of your
loans or credit cards and clear the debts with the highest interest rate or
repayment. Clearing the high cost debts first will give you breathing space to
pay off other debts faster by saving money on interest. Make a plan to start
paying off debts and stick to it. Start clearing expensive debts, like credit
cards or worse still payday loans, first so that you can reduce the rising tide
of compound interest drowning you by increasing your balance faster than you
can clear it. List all debts and monthly repayments on a spreadsheet and plan
your route to financial freedom. This one step of making a list of your debts
will make a huge difference.
·
A
- AXE NON-ESSENTIAL OUTGOINGS.
Go through all your standing orders and direct debits and ruthlessly cut out
everything you don’t need, especially things like Sky TV or that membership of
the gym you only visit once a month. Exercise at home and find a way to walk
more often.
A
- AXE NON-ESSENTIAL OUTGOINGS.
Go through all your standing orders and direct debits and ruthlessly cut out
everything you don’t need, especially things like Sky TV or that membership of
the gym you only visit once a month. Exercise at home and find a way to walk
more often.
·
N
- NEVER PAY THE MINIMUM
PAYMENT ON A CREDIT CARD. Most people don’t realise that if you just pay
the minimum amount required on a credit card it will take years before the debt
is paid off. Pay as much as you can and ask the bank to deduct that amount or
make extra payments manually to clear the balance faster.
N
- NEVER PAY THE MINIMUM
PAYMENT ON A CREDIT CARD. Most people don’t realise that if you just pay
the minimum amount required on a credit card it will take years before the debt
is paid off. Pay as much as you can and ask the bank to deduct that amount or
make extra payments manually to clear the balance faster.
·
A
– APPLY FOR A BALANCE TRANSFER CARD.
Whilst this is a short-term measure, transferring credit card balances from
high interest charging companies to 0% cards will give you breathing space.
Watch out for the balance transfer fees which can be a high as 3%. Sometimes it
can be cheaper in the long run to pay a small interest rates with no balance
transfer fees.
A
– APPLY FOR A BALANCE TRANSFER CARD.
Whilst this is a short-term measure, transferring credit card balances from
high interest charging companies to 0% cards will give you breathing space.
Watch out for the balance transfer fees which can be a high as 3%. Sometimes it
can be cheaper in the long run to pay a small interest rates with no balance
transfer fees.
·
G
– GENERATE EXTRA CASH.
One of the most obvious ways of reducing your debts is to increase your income.
This can be achieved in a number of ways including starting part-time business,
working extra hours, qualifying for a pay rise or getting a higher paid job.
G
– GENERATE EXTRA CASH.
One of the most obvious ways of reducing your debts is to increase your income.
This can be achieved in a number of ways including starting part-time business,
working extra hours, qualifying for a pay rise or getting a higher paid job.
·
E
– ENTITLEMENT TO BENEFITS OR WELFARE SUPPORT. Check if you are entitled to any benefits or
tax credits. This especially applies to single parents and people in low paid
work. One benefit or tax break could transform your finances overnight. To find
out more check on the government website or see your local Citizens Advice if
you live in the UK.
E
– ENTITLEMENT TO BENEFITS OR WELFARE SUPPORT. Check if you are entitled to any benefits or
tax credits. This especially applies to single parents and people in low paid
work. One benefit or tax break could transform your finances overnight. To find
out more check on the government website or see your local Citizens Advice if
you live in the UK.
·
D
– DON’T IGNORE BILLS OR DEMANDS.
Never ignore a bill, red letter demand and especially from a debt collector,
bailiff or court letter. Burying your head in the sand will not make the
problem go away and ignoring any of the above will make matters far worse and
cost you a whole lot more in the long run with interest and penalties. Ignoring
bills and letters will ultimately lead to County Court Judgements and debt
defaults which will stay on your record and credit file for up to six years, effectively
ruining your credit rating.
D
– DON’T IGNORE BILLS OR DEMANDS.
Never ignore a bill, red letter demand and especially from a debt collector,
bailiff or court letter. Burying your head in the sand will not make the
problem go away and ignoring any of the above will make matters far worse and
cost you a whole lot more in the long run with interest and penalties. Ignoring
bills and letters will ultimately lead to County Court Judgements and debt
defaults which will stay on your record and credit file for up to six years, effectively
ruining your credit rating.
·
E
– ENTER INTO AN ARRANGEMENT.
Speak to your creditors if you are having difficulties and consider an
arrangement after taking independent advice. There are informal and formal
arrangements, such as a debt management plan or IVA. Take independent legal and
financial advice from a professional, not just from a salesperson selling a
‘debt clearance’ service.
E
– ENTER INTO AN ARRANGEMENT.
Speak to your creditors if you are having difficulties and consider an
arrangement after taking independent advice. There are informal and formal
arrangements, such as a debt management plan or IVA. Take independent legal and
financial advice from a professional, not just from a salesperson selling a
‘debt clearance’ service.
·
B
- BE
PROACTIVE AND ASK FOR HELP. This could involve talking to your local Citizens
Advice office, an independent debt counsellor or even a relative. We all need a
little help from time to time and being in debt can be lonely and depressing.
B
- BE
PROACTIVE AND ASK FOR HELP. This could involve talking to your local Citizens
Advice office, an independent debt counsellor or even a relative. We all need a
little help from time to time and being in debt can be lonely and depressing.
·
T
- TAKE YOURSELLF OFF CONSUMER DEBT FOR GOOD. Kick the habit. Never borrow to buy expensive
consumer items which depreciate in value, and avoid rip-off deals like rent-to-own
consumer products like the plague. The old adage of “if you can’t afford it do
without it” should be drummed into this modern ‘I want it now’ age! We have
become too accustomed to the ‘buy now pay later’ culture of ‘easy credit’,
which should be called ‘easy debt’, and keeping up with the joneses,
which I mention in my book ‘Yes, Money Can Buy You Happiness’.
T
- TAKE YOURSELLF OFF CONSUMER DEBT FOR GOOD. Kick the habit. Never borrow to buy expensive
consumer items which depreciate in value, and avoid rip-off deals like rent-to-own
consumer products like the plague. The old adage of “if you can’t afford it do
without it” should be drummed into this modern ‘I want it now’ age! We have
become too accustomed to the ‘buy now pay later’ culture of ‘easy credit’,
which should be called ‘easy debt’, and keeping up with the joneses,
which I mention in my book ‘Yes, Money Can Buy You Happiness’.
M.A.N.A.G.E. D.E.B.T.
MAKE A LIST
AXE NON-ESSENTIAL OUTGOINGS
NEVER PAY THE MINIMUM PAYMENT ON A
CREDIT CARD
CREDIT CARD
APPLY FOR A BALANCE TRANSFER CARD
GENERATE EXTRA CASH
ENTITLEMENT TO BENEFITS OR WELFARE
SUPPORT
SUPPORT
DON’T IGNORE BILLS OR DEMANDS
ENTER INTO AN ARRANGEMENT
BE PROACTIVE AND ASK FOR HELP
TAKE YOURSELLF OFF CONSUMER DEBT
FOR GOOD
FOR GOOD
Bonus Tips
1. Never use expensive payday
lenders, unless you have no other choice, and especially unauthorised doorstep
lenders will charge you a small fortune interest.
lenders, unless you have no other choice, and especially unauthorised doorstep
lenders will charge you a small fortune interest.
2. Start building your credit rating
by making repayments on time and clearing credit cards faster. The higher your
credit rating, the more access you will have to cheaper finance and the less
you will be dependent on expensive credit.
by making repayments on time and clearing credit cards faster. The higher your
credit rating, the more access you will have to cheaper finance and the less
you will be dependent on expensive credit.
Word of the Day
IVA
Individual Voluntary Arrangement
In England and Wales, an individual voluntary arrangement (IVA)
is a formal alternative for individuals wishing to avoid bankruptcy.
is a formal alternative for individuals wishing to avoid bankruptcy.
The IVA was established by and is governed the Insolvency Act
1986 and constitutes a formal repayment proposal presented to a debtor's
creditors via an insolvency practitioner. Usually (but not necessarily),
the IVA comprises only the claims of unsecured creditors, leaving the rights of
secured creditors largely unchanged. Insolvency practitioners charge initial
and ongoing fees that are in addition to the debt.
1986 and constitutes a formal repayment proposal presented to a debtor's
creditors via an insolvency practitioner. Usually (but not necessarily),
the IVA comprises only the claims of unsecured creditors, leaving the rights of
secured creditors largely unchanged. Insolvency practitioners charge initial
and ongoing fees that are in addition to the debt.
An IVA is a contractual arrangement with creditors and
can be as flexible as an individual's own circumstances; they can therefore be
based on capital, income, third party payments or a combination of these.
can be as flexible as an individual's own circumstances; they can therefore be
based on capital, income, third party payments or a combination of these.
In this process, a debtor who has enough money left over after
priority creditors and essential expenses, may be able to arrange an individual
voluntary arrangement.
priority creditors and essential expenses, may be able to arrange an individual
voluntary arrangement.
Based on taking independent advice, debtors with less serious
problems may wish to consider a debt management plan.
problems may wish to consider a debt management plan.
The procedure for businesses is the company voluntary
arrangement. There is also Administration where the business is effectively run
by an appointed administrator. In the US, companies can take advantage of
Chapter 11 rules and many companies have come back from this, including some
owned by Donald Trump
arrangement. There is also Administration where the business is effectively run
by an appointed administrator. In the US, companies can take advantage of
Chapter 11 rules and many companies have come back from this, including some
owned by Donald Trump
There are more
examples and practical steps to getting rich and being happy in my book, Yes, money can buy happiness, I cover the 3
R’s of Money Management, the Money B.E.L.I.E.F System and much more. Check it
out on Amazon http://bit.ly/2MoneyBook.
examples and practical steps to getting rich and being happy in my book, Yes, money can buy happiness, I cover the 3
R’s of Money Management, the Money B.E.L.I.E.F System and much more. Check it
out on Amazon http://bit.ly/2MoneyBook.
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