It is important to choose the right debt management plan for you. The good news is, there’s plenty of different debt management strategies and paths to take to get you back to a healthy financial place. However, how do you know which financial management path to choose?
Choosing a Do It Yourself, or DIY financial management plan often works best for people with a strong sense of discipline and lower amounts of debts. However, not everyone is ready to take the full responsibility of this alone, because oftentimes it’s one’s inability to manage their finances that got them into debt in the first place. Determination and intelligent strategizing help people get out from under even larger debts when structured plans are properly implemented.
If you are someone who can take on financial management DIY, a good place to start is to organize and tabulate all of your expenses, and compare them to your earnings. There are many easy ways to do this. You can use templates that already exist for you in Microsoft Word, Google Sheets, and other easy-to-access programs. Or, you can create your own finance and expenses chart in easy to use programs like Microsoft Excel.
Making a personal profit loss sheet, or a personal expenses vs income sheet is a process that is essentially the same for both individuals who are in debt and families who are in debt. To reduce or eliminate unnecessary expenses and use the extra money to increase regular payment amounts to your debtors is the best way to see the path you must take to financial health and to become debt free.
Hiring a professional financial debt advisor involves a consultation session. Your financial advisor creates a plan based on the information you provide combined with everything showing on your credit report.
A plan is created combining payments to all your debts into a single monthly payment amount. Payments are automatically debited from a designated account and plans commonly take between three and six years to be successfully completed.
Debt consolidation and debt reverse pyramid plans are two of the most common debt management plan options used today. Sometimes a debt relief company convinces your debtors to lower your interest rates or waive previously accrued late fees instead of consolidating a debt into the larger plan.
Trinity debt management is a Christian-based debt management company focusing on debt relief as a means to restore spiritual wellbeing. DMCC debt management is a nonprofit credit counseling group with a commitment to financial management education for consumers. Both these non profit debt management companies offer unique services, which might be the best option for you. Sometimes, however, alternate methods of creating debt relief are required.