Will Consumer Debt Counseling Help You?

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Financial stress can cause sleepless nights and unhealthy living patterns. When and individual begins to feel the strain of their finances pulling at them they begin to work longer hours with little rest. Often times they find that this extra work does not eliminate the financial pressures that they are under so they begin to consider other methods of increasing their cash flow. This is done by either applying for more credit cards or taking out another loan. They soon realize that the peace they felt with the extra cash is short lived because now their debt is higher and they are struggling more than before to make the minimum payments to their creditors.

There are many benefits to consumer debt counseling, which includes but is not limited to assisting you in lowering your monthly payments to your creditors. Another benefit is providing you with teaching tools on how to budget your money. Making a budget and sticking to it is an essential part of getting and staying out of debt. Here are five steps on how to budget your money that will move you from living with debt to living without debt (or keep you from sliding into debt).

Step 1: Know your income. If you do not know exactly how much money is coming into your household, it is a good bet you have no idea how much is going out. Sit down a figure out what your monthly income is. Consider not only your paycheck, but also all other sources of income and add them together to arrive at your monthly total.

Step 2: This may take a bit more time. You need to list all your expenses, both fixed and variable. Items such as your mortgage or rent, utilities, food, clothing, gas. Remember to include expenses such as childcare, personal expenses, etc. You want to also determine how much you are spending on insurance and taxes and when they are due so that you can set aside the money to pay them at the appropriate time. Add them together to arrive at your monthly expenses.

Step 3: Subtract your expenses from your income and write down the total.

Step 4: Now it is time to list your unsecured debts such as credit cards. Write down the monthly payment and balance owed on each.

Step 5: From the total you wrote down in Step 3, now subtract the amount of your unsecured debt. If the amount is a negative number, it is time to work aggressively towards becoming debt free. You can do this by contacting a consumer debt counseling representative today. If the amount is a positive number - you are doing great - continue on your path to living debt free.
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