The wonderful holiday is over. Now it is time to deal with the debt. Perhaps you have made a New Year??s Resolution involving this topic. We have invited Jeff Romine, partner with the Financial Planners of Missouri to discuss this topic.
Question 1: Now that the holidays are behind us, I am sure many people are finding themselves deeper in debt. Can you help interested viewers to figure out how to deal with their debt?
My best advice: ??Do not get into debt!??
If your debt is out of control, develop a resolve to be different.
Avoid the problems of debt: tension, depression, loss of sleep, excess worry and stress, family fights, and problems leading to divorce.
Question 2: What if someone wants to get their debt under control but do not have the discipline, what can they do in this situation?
- For dire situations, consider bankruptcy
- Or Credit counseling
- Take action to change your habits
- Find the internal strength
- Communicate with your spouse
Question 3: Are there any actions that you would suggest?
Here are steps to consider:
- Get rid of all of your credit cards except one for emergencies
- Only use a debit card
- Start saying ??no?? to dinners and lunches out,
- Forget about expensive cell phones and technology,
- If you must have a pet, delay until you can afford one,
- Do not go out for your entertainment,
- Buy used automobiles,
- Consider shopping in thrift stores for your clothes items
- Do not borrow money.
- Talk with your spouse
- The bottom line is: Do not, under any circumstance, spend more than you take in!
Question 4: What actions would you recommend to pay off debt?
Develop a strategy to attack your debt:
- Make a list of your consumer debt
- Prioritize the debt by identifying
- list the debt from smallest to largest, or
- list by size of interest with the largest rate first, to smallest rate,
- Decide your strategy.
- Have the resolve to pay down your debt.
- As you progress, attack the next item on your list.
Options if you need cash:
- Can you increase your earnings or get another job?
- Cash in your savings, if any.
- Ask family members for help.
- Investigate transferring high interest credit card balances to low interest cards.
- Consider a low-interest home equity loan
- Negotiate with your creditors
- Consider borrowing from life insurance policy with cash value,
- Or as a last resort borrow against a 401k
- Change your habits.
- Learn to live within your means.
- Learn to say ??no?? to unnecessary purchases,
- Ignore the minimum payments and pay off the entire balance on your credit cards.
- Use only one credit card for emergencies
- Use a debit card for all of your purchases.
- If married, communicate with your spouse
- Develop a long-term vision of a time when you will have a good life, without debt.
Jeff RomineFinancial Planners of Missouri
110 S Franklin St.
Kirksville, MO 63501