Manage Your Debt: #1 Figure Out How To Free Up Some Cash

Avoid Bankruptcy and Free Your Debt . Get Refinance Loans , Secured Debt Consolidation or Debt Settlement Advices.

Manage Your Debt: #1 Figure Out How To Free Up Some Cash

One of the most common mistakes people make in a financial crisis is not cutting back hard enough, fast enough.

Or maybe you need to take a hard look at some of your bigger bills. Even your so called “fixed” expenses, such as your mortgage or rent, aren’t really set in stone. Some people who struggle to hang on to homes that are simply too expensive for them, when the smarter course would be to move.

Don’t panic quite yet. For the moment, you don’t have to do anything, other than write down the potential savings you can identify. You might find it helpful to break those savings down into categories:
1. The easy stuff: Expense that you could ditch with little effort
2. The harder stuff: Expenses that would require more sacrifice to trim
3. The last ditch stuff: Expenses you would cut only as a last resort

There are two other good ways to raise cash:
By selling stuff and by making more money. If you can sell an extra vehicle, hold a yard sale, or auction unused items on eBay, you might be able to free up a good chunk of change. You also might consider freelance work or a second job temporarily. If you’re already working full time, this can seem pretty daunting, but you might be able to do something for a few months that you’d never be able to sustain permanently.

You might notice that I haven’t included some of the most touted “fixes” for credit problems: home equity loans, other debt consolidation loans, and withdrawals or loans from retirement plans. That’s because these “solutions”, as typically applied, often make matters worse in long run.

Home equity loans, lines of credit, and cash out mortgages refinances are particularly seductive, because they tend to offer low rates and tax deductible interest, to boot. But they come with big problem:
1. Most people who use home equity to pay off credit card and other unsecured loans ultimately end up deeper in debt within a few years. That’s because they haven’t changed the fundamental problem of overspending that got them in trouble in the first place.
2. Such loans usually turn what should be short term debt into long term debt. You could end up paying more in interest, and again, wind up poorer, than if you’d buckled down and just paid off the cards of your current income.
3. Using these loans to pay off credit cards, medical bills, or personal loans turn unsecured debt, which could have been erased in bankruptcy court, into secured debt that can’t be wiped out, and that puts your home at risk as well.

Your Credit Score Liz Pulliam Weston

Manage Your Debt: #1 Figure Out How To Free Up Some Cash

Avoid Bankruptcy and Free Your Debt . Get Refinance Loans , Secured Debt Consolidation or Debt Settlement Advices.