Ladydebt

Unfortunately, in todays world, debt in very nearly at endemic levels and is very much a way of life – of which to be fair, the finger cannot be pointed at any one single source to blame, but rather the blame must be shared by all involved to some extent.

Outside my online businesses, I also run a Financial Services Company – who, I would point out, are not involved in issuing or creating debt, but rather it is a part of our business that we often see it, and how it easily affects lives of many people, to the extent that they become blinded and even apathetic.

Debt can (and sometimes does) cause absolute devastation – occasionally to the point of suicide in the rare few.

We (and Im speaking from a macro perspective) cannot simply stop debt or right it all off. The very fiscal nature of the world means that economies could not stand a wipe-out. Economies need debt to survive, just as any economy must have an element of unemployment to be sustainable (and I know as I live somewhere with zero unemplyment – and its more a curse than a blessing).

Instead, we should look to try and tackle this in three ways:

1.Intensive education to ensure everyone is fully aware of the potential problems associated with and sometimes caused by debt. This could be done by Consumer Groups, Government and especially the institutions behind the debt – Credit Card companies, Banks etc.

2.Greater restrictions placed on the issuers of debt (Credit Card companies, Banks etc.) to make it harder to people to get into debt in the first place, increased requirements Due Diligence tests, enforcement of positive action support by these companies as soon as they spot a problem with a customer (get them to help more, rather than threaten action) and independent overseeing of companies with higher than average customer default rates to ensure fairness.

3.For those in debt and with problems – the marketing promotion to them to know they can (and should) speak to someone about it as soon as possible. Debt Counsilling (often provided by charities self-help groups) are a good start. They have a great deal of experience – and its highly unlikely they havent heard YOUR situation before 100s of times – and they usually have good advice and guidance.

Dont ignore it. Dont stick your head in the sand. Act!

Debt can be a cascading problem, and it can overtake you in no time. Often, people consider debt as taboo – a bad thing – dont talk about it. A little like having an addiction and society doesnt like addicts, does it?

It doesnt have to be that way.

We all need to play a part – and especially be understanding supportive of those in debt – because very often, its circumstances beyond their control which got them into this mess.

Debt is a way of life for many Americans. We owe money on our homes, our cars, our possessions (from furniture to clothes), and our education. Many Americans are so mired in debt they aren’t even sure just how much they owe and to whom — even worse they sometimes don’t even remember just what caused their debt.

Some debt is good for you. For example, what you owe on your home can provide a nice way to balance out your income tax. A little debt is not a bad thing either as making regular payments to various creditors helps build your credit rating which makes it easier for you to obtain loans at good rates. However the truth is that most Americans have more than a little debt — and many owe far too much money and are already, or soon will be, in financial trouble as a result.

Finding yourself owing a lot of money is not the end of the road and you can stop your cycle of debt by taking four positive steps to break the cycle.

First, attack your high-cost debts. This likely includes credit cards where you may be paying high minimum payments and high interest rates. Pay off the balances on credit cards carrying the highest interest rates first. Continue making your minimum payments for lower-interest cards but concentrate on paying off the highest interest. When the high-cost cards are paid off then work to eliminate the balances on your other cards.

Second, reach out to your creditors. If you are going to be late or have difficulty paying your minimum payments then contact the credit card company. Even if you can make all your payments in a timely fashion there are two benefits you can reap from contacting the card issuer. First, you may be able to negotiate lower rates or more favorable terms. Second, they might be able to recommend alternatives that can minimize damage to your credit rating.

Third, consolidate your debts as much as possible. You can accomplish this a number of ways. One possibility is simply transferring balances from one credit card to another with a lower rate, but be aware of transfer fees before choosing this option. Another possibility, if you own your own home, is to take out a home-equity loan or line of credit which should have a lower interest rate than most credit cards can offer as well as offering tax deductions. Finally, you can also consider a secured loan offering the value in another form of property, your vehicle for example.

Fourth, don’t sacrifice your retirement savings. Obviously paying off your debt should be a high financial priority but cutting what you save for retirement to do so may not be the wisest course — especially if that becomes a long term habit or if you are losing out on your employer’s matching funds as a result. Perhaps you may be able to borrow against (or from) your retirement funds at a lower interest rate which will allow you to continue to save for retirement while also getting out from under your debt.

While owing money may well be the American way it can also be a tremendous burden to bear. You can shed the weight of your load or at least trim it down to a more manageable level by taking these four steps.