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Cheat Your Debt March 20, 2008

Filed under: articles — financialponderings @ 4:58 pm
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Cheat Your Debt
By Daniel Rembrandt

I’m lucky that I’ve been able to cheat my debt with the right techniques, and there’s no reason anyone else can’t. I’ll admit that my debt situation isn’t the same as yours, but there are some principal truths that apply to everybody.

For the past few years, real wages have not been keeping pace with inflation. In fact, the average household income has steadily decreased for five years in a row. Despite this, consumption continues to increase. How can this be? The answer is, people have been increasing their amount of personal debt. About 95% of Americans don’t have enough saved for retirement, yet constantly buy, buy, and buy.

You might be in debt simply because you’re a poor spender such that you spend more than your income and if you happen to have a decrease in your income, you still do not control your spending to balance with your income. Then you find yourself in a crisis that you could have avoided. The best solution to this is to change your spending habits and stay away from money owing. Also get to know your personal finance pattern so that you will be in a position to balance your income and your expenses.

Don’t forget, there is the other face of the coin, not many of us are prepared to face the adversity of debt, in this case it may be necessary to contact the creditors and seek a reduction on interest rates or maybe even ask for a reduced payout. A reduced pay out is also known as a settlement, or a discount on the amount owed to a particular creditor. When we follow this route we are reducing debt and therefore reducing stress.

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