Debt Assistance Guru

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photo credit: D H Wright

If you are currently renting a property while trying to pay off debt then it goes without saying that the less you spend on your rent the more excess cash you will have at the end of the month to pay off your debt. And the sooner you achieve that goal the sooner you can get on with living life to the fullest.

Today then I bring you six ways of spending less on your rent. They may not all apply to you – some research is likely to be necessary – but depending on your situation they all have the potential to seriously reduce your monthly expenses thus helping you to pay off debt quicker.

Sublet

If you’re currently renting a property that is larger than you need (i.e. has spare bedrooms) then why not consider subletting your available space to other people? Depending on what your rental agreement states websites such as Craigslist, Gumtree and Spare Room can all be used to advertise your available space and recruit new housemates.

House Share

On the flipside, if your current rental agreement doesn’t allow such things why not go the other route and instead consider giving up your existing home and instead moving in with other people. You can rent *their* spare room thus saving you money.

But it’s more than just money. In many cases these “housemate” deals are all inclusive – so you have no extra household bills to pay – and your responsibilities around the home are also likely to be minimal thus freeing up more of your time to either work overtime or simply relax and enjoy yourself.

Downsize

Don’t like the idea of sharing your home with others? Then consider moving to a smaller property – or a property of the same size in a less expensive area. Either of these moves can save you considerable money though be sure to take into account the costs of moving in order to calculate how much money you’ll save in real terms.

Couchsurf

Couchsurfing is more of a temporary solution than a permanent one (like your debt, I hope!) whereby people offer up their couch or spare room for free. Why? Well to make their life more interesting.

Typically the stays for couchsurfs are short-term – a week at best – so you may have to move regularly if you’re considering this option but even a month or two spent like this moving around your home town or city could save you a small fortune, allow you to get back on your feet and also meet some new friends along the way.

Find A Job With Accommodation

Between my girlfriend and myself we have had a number of “accommodation included” jobs over the years. Often they don’t pay as well as a standard job for obvious reasons but when you no longer have to worry about rent (and in some cases bills) you don’t have too much more you need to spend money on. Of course if you’re a couple and one of you gets a job like this while the other works fulltime you can quickly pay off a significant amount of debt due to your low overheads.

Volunteer

In a similar vein, some volunteering positions include accommodation as part of the deal. Whether this option makes sense for you will depend on your own personal circumstances and your household budget but it may be that you can fit a part time job around your volunteer activity, live in the laid-on accommodation and still come out on top.

Become A Student

The last option will require some research but in many areas students are exempt from a variety of bills and taxes which can make becoming a registered student a profitable activity in itself – even before you consider what the extra qualification could do for your career (and earnings prospects).

For example in the UK students do not have to pay council tax (property tax) which can save you over $2000 a year for the average property. Find a course that charges less than this and the difference can be spent on debt repayments rather than everyday living expenses.

photo credit: lu_lu

Health and fitness is big business with plenty of customers who are willing to spend big money to look and feel their best. From dietary supplements to weight loss pills, gym memberships to $200 pairs of trainers; it’s possible to spend a *lot* of money on getting into shape.

However it’s not necessarily essential.

The fact is that getting fit is more about an understanding of what works (which is often very simple indeed) combined with the discipline and motivation to actually make those changes in your lifestyle.

That expensive gym membership isn’t going to do you a bit of good if you never go or if you work out ineficiently or even injure yourself along the way through poor form.

So today I wanted to talk about how I got myself into my best shape ever without spending a fortune.

Finding Cheap Fitness Supplies

I don’t have a home gym, or indeed any expensive equipment. Infact I have personally found that I can lose weight, stay trim and feel great with the most basic of supplies.

To me that means clothing that helps keep me cool and comfortable while doing my exercise. Sure, you can buy the latest Nike clothing if you want but any old t-shirt and shorts will do and there are numerous discount stores around these days selling cheap end-of-line sports wear. If you’re in the UK like me, take a look at Sports Direct where you can kit yourself out for next to nothing. Alternatively try taking a look at Ebay for budget sports clothing.

For trainers I do like to try and buy a reasonable pair – though certainly not top of the range. I look for a pair that are supportive, sporty-looking and have a thick, springy sole (to protect my ankles).

Besides this a water bottle, sweat band and a watch come in handy. You’re all set for next to nothing.

Healthy Eating On A Budget

You don’t need expensive diet drinks and creatine powder. If you want to shed pounds and feel your best ever the trick is all about eating low-carb, good-quality food. Fruit. Vegetables. Lean meat. Brown rice. And that doesn’t have to cost the earth.

Here’s an example of my standard diet to give you an idea of what I eat. For breakfast I eat an omlette with a random assortment of chopped peppers, tomatoes, spring onions and turkey bacon. For lunch I have a mixed leaf salad with some grilled chicken or turkey. For dinner I have vegetables and some meat. I drink at least one glass of water with every meal and for snacks I consume fruit or nuts.

That’s it. Nothing expensive or artificial. And what’s more this diet *works*. I should know – I used it to lose almost six inches off my stomach in just three months.

All the standard rules for buying food on a budget apply. Consider buying in bulk for a discount. Visit your local supermarket at the end of the day when they are reducing the price of short-dated food. Try buying fruit and vegetables from local markets or even growing your own to keep costs down.

How To Exercise For Free

There are two exercises which are free, require no specialist equipment, and have formed the backbone of my workouts for years. The first of these in the humble push-up. I aim to carry out 100 push-ups, three times a week. It takes time to build up to that level but keep a journal of how many push-ups you manage and aim to beat your score each time you exercise.

The second exercise really is the one that has had the biggest effect on my health and figure and that is high intensity interval training. That’s a big word for a simple principle. Rather than going for a standard jog, where you move along at the same pace all the time, you aim to change your speed.

Run, at full speed, for 30 seconds. Then walk or jog slowly for the next 30. Then pick up the pace again and so on. Even 15-20 minutes like this will quickly have you worn out meaning more fat burned, greater fitness and less time spent exercising for the same results. Oh, and of course it’s free. I do this three times a week too and that’s basically my exercise regime in a nutshell.

So there you have it. How I spent less than $100 to get set up, succeeded in living on a budget yet got myself into my best shape ever. Please feel free to share any tips here that you may have about getting in shape on a budget – we’d love to hear from you in the comments section.

photo credit: SqueakyMarmot

When you’re struggling with debt and are looking for a way out of spending so much of your monthly income on debt repayments it’s quite likely that your mind will turn to the various professional debt assistance services available these days including debt consolidation loans and debt reduction programs.

At first glance these may seem like very similar services and indeed many debt elimination companies offer both services at the same time – indeed sometimes more than just these two – and so telling them apart and deciding which is the best option for your situation can be something of a challenge.

Debt consolidation loans essentially allow you to take out an additional loan which you can then use to repay your existing debts. This leaves you with just one single debt repayment to make each month rather than a host of old debts to keep under control.

Opinion is divided on debt consolidation loans. One the one hand this can be a very useful tool for gaining control of your financial future and keeping up to date with your debt repayments whilst reducing your monthly outgoings.

On the other hand the additional interest charged by debt consolidation companies will often mean that by the time you have finished paying off the loan you will have paid back considerably more than if you had just paid your original debts.

Of course for many people this is less important than gaining control of your finances so you can start to live a normal life again rather than worrying all the time about meeting your financial obligations.

Debt reduction schemes are rather different in that you authorize another company on your behalf to negotiate with your creditors for you. This means you no longer have to deal with any nasty letters of phone calls about overdue debts and have a professional on your side. These debt reduction experts negotiate to reduce the overall debt you have and create an affordable agreement with each of your creditors.

The upside of debt reduction services is that your debt should actually go down rather than up when using these services though you also need to be aware that these services have the potential to significantly affect your credit rating while a debt consolidation loan is far less likely to have this overall effect.

So now you understand the differences between these two forms of debt assistance it’s just a matter of working out which solution is likely to work best for you.

photo credit: Ed Yourdon

They say that disagreements over money cause more relationship break-ups than any other factor. Money can be a touchy subject for so many reasons; whether that’s because two partners in a relationship value money differently, earn different amounts, like to budget in different ways or have different spending habits. The possibilities for conflict are many and varied.

However one of the most serious financial situations for a couple to get into involves the issue of serious debt. I don’t just mean a few hundred dollars on a credit card but rather when the debt situation starts to damage the relationship you have with your partner. When it is causing arguments and leading to unnecessary stress in an otherwise enjoyable and rewarding relationship.

Having had a similar experience myself in the past I thought that a few pointers on dealing with debt problems with your boyfriend, girlfriend, husband or wife might come in useful for some regular readers.

Understand The Problem

The first step in dealing with debt problems as a couple is laying your cards on the table. Be honest with each other about the problem. Pull out the bills. Run the figures. Get a good grasp of how serious the situation is so you both know exactly what is going on and neither of you is with-holding information.

This first step is almost certainly the hardest and most painful and you both need to work together, openly and honestly, without name-calling or blame, in order to both really clear the air and understand your situation.

Understand The Cause

Once you know how serious your debt problems are, what you owe and to whom the next step is to examine the causes of this debt. Perhaps you just both spend more than you earn. Maybe one of you has an obsession with buying a certain product. Maybe they are even gambling debts.

Whatever the situation you need to look long and hard at the situation to try and understand how you have managed to get yourself into this situation in the first place. Only by doing this will you be able to start to understand how you’re going to get back out of debt again and furthermore how you’re going to ensure you don’t slip back into debt in the future.

Try looking at the bills that you owe to see what you bought that lead to them. Discuss why the bills weren’t paid when they first arrived – what else did you spend money on? Credit card bills, bank statements and utility bills can all be used to get a better understanding of your financial situation and where your money has been going while you clocked up debt.

Agree On A Solution To Your Debt Problem

Once you have a deep and honest understanding of your financial situation the next step in the process of becoming debt free is to examine ways you are going to dig yourself back out again.

A good idea seems to be to put some time aside with a piece of paper each and a calculator where you can sit and brainstorm ideas. Be as wild and crazy as you like with your suggestions and once you have a list go through the ideas and discuss them in far more depth.

Both of you must be constructive and positive and willing to make sacrifices to get your financial situation under control so again it is important that you are both in the right frame of mind if this step is going to work properly.

Work Together To Become Debt Free

Once you have a plan that you both agree on to help you get out of debt the final element is working on making the plan a reality together. Consider planning monthly progress meetings where you can see how much progress you have made and agree that you will discuss all major financial transactions like household bills, income and so on regularly so you can both feel certain the plan is being actioned and no secrets are being with held.

photo credit: Sara. Nel

If you’re in debt then it’s entirely possible that the situation is causing you considerable stress and worry. Maybe it’s even making your life a misery – especially if you have got behind on your payments and are finding that your creditors are trying to chase you by phone and mail for money you simply don’t have.

If this is the case then it’s important to understand that to a degree we control how we react to the world around us. Certain situations cause us to be happy, sad, relaxed or stressed. And we have some control over which these are. We can choose to be happy even when things go wrong with a little practise.

The fact is that if you’re in quite a bit of debt (enough to stress you out) then it is going to take you some time to get the situation under control and then pay off that debt so you’re free of such a burden. For many people the process will take some years of effort in order to finally become debt free.

Do you want to feel stressed for the next few years? Because if you’re not careful that is what can happen.

I know: it happened to me once upon a time.

I had a nasty split with an ex-girlfriend of mine which really took the wind out of my sails. Not only was I left renting a property I couldn’t afford on my own but I also was so depressed I stopped paying a lot of bills. The more phone calls and letters I got, the worse I felt until I just didn’t want to be at home any more. I just wanted it all to go away so I could start again. That went on for months.

Eventually I realized that these creditors won’t going to go away. That I would have to pay back the money I owed and that it was going to take some careful negotiation with my creditors followed by a period of very careful money-management to balance all my debt repayments and get myself back on track.

But as it was going to take some time I realized there was no point in getting stressed about the situation; about making myself ill and depressed as a result.

I realized that once I had negotiated payments I could afford with my creditors, it was then only a matter of time until I was debt free. I just had to keep going to work, and sending off those checks, and sooner or later I would be debt free.

Even better, as I managed to pay off one debt after another I was able to roll even more money into repaying those existing debts and so I paid them off faster and faster each month.

If you’re stressed about the amount of debt you have right now it’s important that you take stock of your situation. Negotiate debt repayments that you can afford, set up with your bank so that these repayments are made every month on payday so you know your payments have gone out and then try to get on with enjoying life.

Sure, you won’t be feeling too flush with cash for a while as your debts get paid off but you also don’t have anything much to worry about any more. Your debt payments have become automatic so you don’t need to put any thouhght into them and instead you can start to enjoy life.

We all have a choice, so choose not to get stressed.

photo credit: alancleaver_2000

Few people find saving money enjoyable. After all the very essence of saving money is all about not spending money that you have. Money that you could spending enjoying yourself; going out, buying new clothes or gadgets or just paying less attention to your monthly budget and allowing yourself a few treats from time to time.

When you save money you are deliberately giving up these short term treats – this enjoyable lifestyle – with the hope that it will benefit you more in the future as your money has time to accrue and to generate interest.

And consciously giving up some of the pleasures of life can be tough, which is why I believe so many people struggle to save money. They’d rather go on vacation than put that money into a savings account where it sits there, teasing you, reminding you of all the things you *could* be doing with that money.

But if saving money is a challenge then there is a tip which can make is rather easier – indeed enjoyable – and that is saving for a reason.

Allw me to explain the difference. When you normally save money in your bank account you are really just putting away a sum of money you have decided on. That money is there for a rainy day but until that rainy day arrives that money really has no purpose other than to sit there gathering interest.

However saving for a reason gives you added motivation to save that money. Saving becomes fun because you have a goal you’re working towards and you know that the more you can save, the sooner you will achieve that goal of yours.

For example if you decide you would like to buy your first house you will likely need a deposit for it. Working out the size of mortgage you will likely be offered allows you to estimate the price of the house you can afford and equally what size deposit you will need. Let’s say you decide on a deposit of $20,000.

Now that $20,000 of savings has a meaning to you. A goal. It becomes a tool to help you achieve your dream of buying your first home. Every dollar you put into that account takes you closer to your dream.

Suddenly you *want* to save money. Indeed you want to save as much as possible because the more you save, the sooner you can buy that house you dream of. Saving becomes easy. Indeed it’s easy not to waste your money on a night out or an expensive coffee when you have a goal like this. As they say, “a dog on the hunt doesn’t stop to scratch his fleas”.

So if you’re struggling to save money each month despite your best effort take the time to consider what you’re saving for. Decide on how much money you will need for that goal then break it down into monthly chunks so you can see how long it will take you to save that money and also give you a target to put away at least that mount each month. And remember that every extra dollar you manage to put away will make your dream happen that little bit sooner for you.

photo credit: mockstar

For many people spending money is a lot more fun than saving it. When you spend money you’re able to buy yourself lovely items that bring you pleasure. When you save money you deny yourself this pleasure and this is why saving can be so tough.

About six months ago I decided to try out an idea I had late one night which I call the “last $10″ concept.

The principle is simple enough. Whenever you’re going to buy something – from a newspaper to a sandwich to a coffee – imagine that you’re down to your last $10 till pay day. Imagine that money in your pocket is all the money you have.

Now consider whether you really want that newspaper that much. Or whether you’d rather hold onto your money. Maybe you can borrow someone else’s paper. Maybe you’re just wasting time and don’t really want the newspaper anyway.

I find this “last $10″ concept makes it easy to either not spend money or to at least try to find a cheaper alternative to what you were going to purchase. And either way you save money that you can put to better use elsewhere in your life.

photo credit: papalars

Despite that fact that many of us work a similar number of hours day-to-day and week-to-week and that our general living expenses can remain similar throughout much of the year many people still find that they experience “peaks and troughs” in their finances.

A peak might be receiving a bonus at work, having a birthday or selling some unwanted items on eBay where you end up with more money than you normally do in a particular month.

The troughs are far easier to identify. Christmas, with all the spending it involves, the extra power you normally use over winter with the colder weather and darker nights, vacations and months in which it seems half your family have a birthday can all result in there being “too much month left at the end of the money”.

Fortunately there are a number of tricks and techniques you can employ in the hope of smoothing out this financial boom and bust leading to a more sustained, predictable and enjoyable way of managing your money – all while avoiding that sense of dread every time you go to the ATM!

Recognize Expensive Months And Save For Them

Some months are going to be more expensive than others so accept that this is the case and try to put some money aside each month to help you cover these extra expenses. For example even a hundred dollars a month put into a savings account will make life a lot easier when Christmas rolls around or you want to book your summer vacation.

Overpay Bills When You Have The Money

When I have a “peak” month I like to try and overpay my bills. I send extra money to the utility companies, to my credit card company and my cell phone provider. By doing this my accounts get into credit which means future bills will be far smaller.

Of course I could just save the extra money to use on those bills in the future but I choose to overpay for two reasons. Firstly I then know this money is safely on my account rather than being a temptation sitting in my own bank account. Secondly there is something wonderful about receiving an electricity bill or phone bill to find that you’ve actually already paid it thanks to the credit on your account!

Put Money Away Where It Can’t Be Touched

Don’t just try to save money in your normal checking account. It will eventually get eaten through – often without you even realizing that it is happening. Instead get yourself a new savings account into which you place your extra cash so that you know it is safely locked away and won’t disappear without your knowledge.

Start A Piggy Bank For Your Loose Change

This is a fun little tip that my girlfriend and I use. We select a certain coin and every time we have one of those coins in our change from our everyday spending it goes into the piggy bank. You will be surprised just how quickly this money can add up and yet because you’re just getting rid of lose pocket change you barely notice it’s gone. You then have a reservoir of cash waiting for you when you really need it.

Make Saving A Game

Saving money can be a bit like going on a diet because it feels like it takes effort. Because you need to control yourself and even potentially deny yourself certain things. This can make it more of a chore than a pleasure.

If this is you then why not consider changing how you think about saving and actually try to make it into a game? See just how much you can actually save each month and consider having a contest with your partner or friends to see who manages to build up their savings account quickest.

Clear Out Your House

Just as I mentioned selling items of eBay consider clearing out your loft or garage and selling unwanted items from time to time to provide you with extra cash that you can save. Try to do this in plenty of time before your expensive months are upon you so you can carry out the process at your leisure and enjoy it rather than feeling under pressure.

Work Overtime

If your workplace offers overtime, consider taking it whenever it is available. Even if you don’t need the extra cash now it can be saved “for a rainy day” – which, lets be honest, always come sooner than we would like.

photo credit: fauxto_digit

Have you ever had that situation where you get to the end of the month and wonder where all your money went? You’re sure you had a few hundred dollars left in your checking account but now it seems to be empty.

Or how about creating a budget to carefully manage your money and limit your spending only to find out that once again you run out of money just before the end of the month?

The fact is that money in a bank account can be difficult to track. Money flows in and out and we only check our balance from time to time meaning that days or even weeks can go passed where we don’t realize how much money we have available to us. And this can lead to some unfortunate situations.

Using plastic – whether that is a debit card or a credit card – cane make it harder to manage your money and increases the chances of blowing your budget no matter how carefully you try. If we’re honest here we go into the supermarket, for example, grab what we need, hand over the plastic and leave. Many of us, myself included, have little or no idea how much we actually spent. The card went through so we left. Problem solved.

Except that when you’re not seeing exactly how much you’re spending, when you’re not keeping track there can be massive differences between how much you think is in your bank account and how much really is there. And this can cause problems with managing your money and particularly with regard to making debt payments.

This is why, when it comes to spending money, I now prefer to use actual money rather than pay on a card. If you have a budget of $200 to live on a week if you are to meet all your debt repayments, then withdraw this $200 from the ATM and put it in your wallet.

It’s not only a lot easier to see at a glance how much of this money you have left but it also affects your behaviour to a degree. This means that little treats that you may give yourself (an expensive coffee, a magazine etc.) are less likely to happen when you actually have to hand across cold, hard cash rather than a plastic card.

And it can also be fun to try and “beat the budget” to see how much you can keep hold of by the end of the week. And *then* if you’ve managed to economize you can spend the remainder on a treat if you want.

So if you want to manage your money better and pay off your debts easier why not try the “cash not card” challenge? I think you’ll be surprised by how much of a difference this simple technique can make to managing your personal finances.

photo credit: me and the sysop

Debt has a nasty habit of affecting our personalities. Serious debt problems particularly those which are overdue or which you are struggling to pay have an unfortunate way of causing us to lose sleep, to feel tired or overly sensitive all the time. It can make the postman arriving or the phone ringing a stressful situation.

As humans we naturally try to avoid stressful, confrontational situations and so the most common action when you are in a situation like this is quite simply to stick your head in the hand. Ignore the phone. Throw those brown envelopes in the bin. Try to get on with life though always with that feeling of dread in the back of your mind.

Contrast this with the feeling of paying off a debt once and for all. The feeling of freedom, of control and of feeling like you’ve really achieved something. No longer do your creditors hound you. No longer do they take money from your pay each month. You’re free. You feel a few inches taller and life seems to have more color.

Clearly the smart thing to do, no matter how unpleasant it may be, is to face up to your debt problems. Facing up to them enables you to start taking control of the situation which will make you feel better right away and starts you down the path to financial freedom.

And yet taking that first step to face up to your debts and take control of the situation is a very difficult thing to do; in my opinion one of the hardest of all. Your adrenaline will likely be running. You’ll be red and feel hot and maybe even sick at the thought of opening those letters, facing up to the facts and then trying to work out a solution.

But the sooner you do it, the better you will feel and the better the outcome will be. Ignored debts only get worse and ignored creditors only get more persistent.

Having been in this situation a few times myself over the years I thought it might to be useful to not only tell you that you’re not alone if you feel like this, and to highlight that facing up to your debts is the best (only?) long-term solution, but also to offer a little guidance on taking that first step.

Personally in a really stressful debt situation I like to gather together everything I might need to deal with the situation. I check my bank balance so I know what payments I can afford. I grab the letters from my creditors. I grab my cell phone so I can call them, together with a notepad and pen to make notes. I grab my checkbook and some envelopes. Lastly I grab a drink, throw all of it into a bag and go out into the countryside – somewhere quiet where I won’t be interrupted.

Once you’ve settled yourself down your sole focus should be on dealing with the financial situation and it’s important to make yourself a promise that you won’t go home until it is resolved. It might take you half an hour or it might take you the best part of the day but you need to make yourself this promise if you are to be successful. Today is the day and no excuse is going to change that.

When you feel ready it’s time to commence. There are a number of steps and if you’re really stressed about the situation then simply take it a step at a time and congratulate yourself after each step.

Step one is opening up the envelopes from your creditors. Put the envelopes into your bag and then concentrate on step two which is actually reading the letters to figure out what you owe, to whom, and what they are hoping you will pay.

The final stage is to try to resolve these debts. There are two ways to do this. Either write out a check (if you can afford it), address it and pop a stamp on so it is ready to post off as soon as you find a post box. The other option if you can’t afford to pay what they want is to ring them up and negotiate and we have covered these negotiation tactics elsewhere on the site.

Keep a note of everything you have agreed and then basically get on with your life. Depending on how stressed you may be about the situation this whole process of facing up to your problem and dealing with it may take you quite some time so try not to put yourself under any pressure. Carry out this process on your day off when you have no other responsibilities.

And lastly enjoy the walk home. By now you should have resolved all your issues and will be feeling far more confident about life. It will feel as though a weight has been lifted and you’ll find it easier to relax, to enjoy life and to laugh.

May I take this opportunity to wish you the best of luck and reiterate how the sooner you resolve these issues the better it will be for you and the happier you will feel with life.