|
A : Budgeting - managing your money better saving more and spending less.
1. Identify your budget. Cash is king. Just like every good business constantly keep an eye on its cash flow, you need to do as well - use our budget plan to breakdown in detail what is your income and out goings.
a. Identify the essential monthly outgoings.
b. Cut down on non essentials.
c. Try to put some money away regularly.
2. Set up two separate bank accounts - one for fixed and essential monthly needs and second for non-essentials and luxuries.
3. Have enough savings for emergencies - at least 3 months worth of wages
4. Think of getting income, accident and unemployment insurance. People will buy car insurance, mobile phone insurance and house insurance, but don’t protect the most valuable asset they own - that is themselves.
5. Get your CREDIT FILE to get an accurate reading of your current debt situation. See getting your credit file.
B. Reduce debt
Try to repay your debt regularly. If your income is insufficient take steps to increase.
Changing jobs for a higher income.
Taking up a second job. This could be a temporary option, but if it allows you to be debt free in the future, it must be considered.
C. Debt consolidation
The definition of debt consolidation is using a single new loan to pay off several existing loans to reduce the total monthly outgoings, This will only happen :
- if the new loan at a lower rate.
These can be :
1. Unsecured personal loan - subject to your credit score you may be able to borrow money as a personal loan to consolidate existing loans (if poor credit score see our repairing credit section)
2. Secured loan on your property - This is what is known as a second charge.
3. Remortgage and borrow additional funds on the mortgage.
the new loan has an extended term to existing loans. (see cost of delaying repaying loans).
An agreement to pay (AP) is NOT debt consolidation.
There are many victims of unsolicied and solicited unscrupulous credit repair companies who have fallen in to the agreement to pay trap.
An AP is presented as the company will take over all the debt and you will make one payment to the credit finance company who will pay your debtors lower regular payments. The finance company will act on your behalf dealing with your creditors.
Technically an AP is set up for those who cannot maintain their regular payments and are in default. The finance company will not only take an upfront fee but also a small charge from the monthly payments.
Many people even with perfect credit payements have been deceived in to taking up AP plans. When you apply for an AP, it is recorded in your credit
file and to any new lender it suggests that you have defaulted or fallen in arrears of your payments.
A word of warning
If you have difficulty with maintaining your regular payments it is better to dear directly or ask a financial advisor who can help. See our credti repair section.
If you are thinking of entering an AP or any other debt management plan make sure the advisor is a qualified financial advisor or a debt advisor. Specially be aware of phone calls promising debt cancellation.
Contact us on : 020 8239 8812 ; email : axessadmin@btconnect.com
|
