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get out of debt Archives | Ovation Credit Repair Services

Oct 24
0

How to Get Out of Debt

By | Debt, Personal Finance

When debt is looming, it can be very difficult to relax and enjoy the things you work so hard to have. With all the financial jargon we have to decipher on our credit reports, not to mention the fact that incorrect information and a plethora of inquires on the reports can be incredibly confusing, you may find it hard to know how to start getting a handle on debt. Between bankruptcies, collections, charge-offs, liens, foreclosures and judgments, it’s hard to understand what the differences are among them and how they can be resolved. There are many steps you can take to improve your poor credit but ultimately, you must lower your debt. (And unfortunately, there are no “get out of debt free” cards).

Assess Cash Flow

The first step to getting your debt under control is to figure out where your money is going. Create two lists: one with all sources of income and one with all of your expenses. In your list of expenses, be sure to include your mortgage and rental costs, utilities, vehicle expenses, and health insurance as well as items such as groceries and toiletries. Now, don’t panic; these numbers can be intimidating, especially when you begin to see how your spending habits are contributing to your overall debt. Keep in mind that knowledge brings power. Understanding your income and expenses is the first step to taking control of your finances.

Find Extra Money in the Budget

If you’re worried that putting all of your money toward paying bills will keep you from having any money to enjoy life, just think about how free you will feel when you pay down your debt and have even more available income each month. Between high interest rates, late fees and over-limit fees, having out-of-control debts will almost always create more financial difficulties. Reevaluate how much you pay for insurance, cable, Internet and phone bills. Track down the lowest rates, and don’t be afraid of switching services to save money.

Eliminate Unnecessary Debt

The next step to eliminating your debts is just that: cut your expenses. Getting rid of debts, like the landline you never use or the extra cable channels you no longer watch, can often be the least painful way to put a few bucks back into your pocket. Remember: small changes can lead to big results. Try packing your lunch and making your own coffee at home; your wallet, your health and the environment will thank you!

Use Ovation Tools

One of the frustrations about reducing your debt is finding the best way to pay off credit cards in a responsible manner. Be sure to utilize Ovation’s many tools to not only help you lower your debt but also show you how your choices can affect your overall payoff plan. Whether you choose to pay off the card with the highest balance first or pay minimum payments with a balloon, these handy tools can help you calculate what options you may have.

Once you begin taking control of your financial situation, you will reap the rewards. Not only will you save thousands of dollars in interest, build a good credit score and obtain better interest rates on loans but you will also be able to better handle difficult times like illness or unexpected job loss.

 

 

Jul 28
0

In Debt Up To Your Eyeballs? Don’t Panic!

By | Budgeting, Debt, Personal Finance

Does this sound familiar?

You have been quietly ignoring your extra credit card expenditures, perhaps even ignoring the growing balance on your credit cards. Maybe you’re only making minimum payments in an effort to juggle a number of credit card payments.

When reality hits, and you suddenly realize the burden of your debt (often accompanied by that sinking feeling in the pit of your stomach), you might decide that it is a good time to panic. But now that you are facing reality, you can consider your options. Fleeing the country is not one of them. Fortunately, there are three simple steps you can take right now to get back in control, that do not involve drastic measures.

  1. The first step you must take in managing your debt is to write everything down, no exceptions. It is not uncommon to use your credit card without a second thought, and writing down every item you purchase incites awareness. It will quickly become apparent how your morning coffee, lunch break and snacks add up to a substantial amount each day. The fact that you have to write it down may discourage you from making purchases that you don’t necessarily need.
  2. Once you have got a record of your daily purchases, the second step is to identify where you can cut monthly costs. With all your spending habits clearly in front of you, it should be easy to determine what is essential and what is not. That morning coffee can be replaced with brew from home, and you can pack a lunch rather than eat out. This is also a chance for you to decide if there are activities you can find alternatives for, such as watching movies at home rather than going to theaters.
  3. Now that you have curbed your spending habits, it is time to attack the mountain of debt. The final step is to utilize the several helpful Ovation tools that are at your disposal. There is a plan catered to every lifestyle and need, making it simple to establish a payment plan that works. Options range from the lowest balance paid first if you need to start off small, to making bimonthly payments if you are ready to take on your debt full force. Regardless of the tool you choose, you will be well on your way to demolishing the debt you have accumulated.

Debt can seem overwhelming at first, but there is no reason to panic. You are fully capable of managing your debt, and it is possible to regain and maintain a good credit rating. All you have to do is adhere to these three straightforward steps. Before you know it, you will be in perfect control of your debt, no plane ticket or suitcases required.

 

Jul 23
0

How to Not Get Out Of Debt

By | Ask a Credit Expert, Featured, Personal Finance

Paying bills is not something you look forward to. Signing away your hard-earned money can be downright painful, but it has to be done. You squeak by with the minimum payment each month, just enough to prevent the creditors from hounding you at your doorstep.

The good thing is, as long as you continue to make faithful payments, the credit card companies won’t say a word. The bad thing is, with a minimum payment only, you are likely to be in their treacherous grasp for several years to come. Of course the creditors aren’t going to complain. They have you right where they want you.

The minimum payment is assurance for the creditors that you have to at least give them something each month. Without it, we would always find an excuse to pay them later. Later might become never for some people, which is simply not good for business. However, credit card companies aren’t doing you any favors by accepting a low amount. A minimum payment only is our least favorite tool, and it is most damaging to your credit.

When purchasing an item such as a car, lenders will tell you that with a specific payment each month, it will take you a certain amount of time to pay it off. Creditors are not nearly as helpful. Certainly, they give you a minimum payment, but it is not related to the time it will take you to pay off your debt. In reality, it isn’t related to anything other than the fact that you owe them money. This may come as a surprise, but creditors are not in the position of helping you pay off what you owe. A minimum monthly requirement is just standard procedure.

The minimum payment may save you money month to month, but it will only hurt you in the long run. If you only make the minimum payment every month, you will accrue enough interest over time to keep you in debt. The longer you owe, the higher your interest rate will be, and the happier the credit card companies are. You can try to fool yourself into thinking that you are making a dent by making a minimum payment, but all you are doing is extending your prison sentence.

To avoid eternal debt, the minimum payment should be an indication of what not to pay. Minimum payments should be reserved for emergencies, when you are truly strapped for cash, not as a simple convenience. There are several much more helpful Ovation Tools that will aid you in repairing your credit. Choose one that works for you, and pay off your debt in a reasonable amount of time.

Jun 27
0

A Real Life Budget Requires Creative Thinking

By | Budgeting, Credit Repair, Personal Finance

We all have champagne wishes and caviar dreams, but in this economy, we’re lucky if we have money enough to enjoy wine coolers and cheeseburgers. If you want to survive rampant inflation and the imaginative wisdom of the federal government, then you need to create a budget that is realistic and doable.

A budget begins with examining your current finances. Start by calculating your income. This is easiest when you have set paydays throughout the month and know exactly how much money is coming in. If your income is inconsistent, such as income generated through part-time work or freelancing, you will have to estimate your monthly income – but be conservative with your estimate. Approximate your income at a level lower than what you believe it will be, as it is always better to have a little extra at the end of the month than not enough.

Once you know how much money you have to work with, it’s time to look at your monthly bills. First make a list of your regular month bills: rent or mortgage payment, car payment, utilities, insurance, etc. While you should be conservative with income estimates, you need to estimate bills at their highest level. For example, budget for your winter heating bill even in the summer, then you’ll have the extra money for other summer costs.

Do the math: subtract your bills from your income. Ideally, you’ll have money left over. If not, then you either need to increase your income, which can be difficult to do, or lower your monthly bills. If you’re having difficulty paying your bills each month, start identifying those bills that you can eliminate:

  • Cable television (Switch from high-end cable or satellite to a free or low-cost streaming service)
  • Land line (especially if you use your mobile phone all the time)
  • Cell phone (eliminate the service or switch to a lower plan or a prepaid phone)
  • Dining out (cooking at home is always less expensive)

Once you have developed a realistic monthly budget, write down the due dates of all of your bills and designate which paycheck will be used for which bills. If the majority of your bills are all due around the same time, you will need to save money from the previous paycheck to cover them or pay them early.

The goal of a budget is to ensure that you can pay all of your monthly expenses, but more importantly, a budget will help you handle those unexpected expenses. You never know when your car will break down or when you will miss work due to illness. It is all about being prepared.

Learn more about how much money you should have in savings and why it’s important to pay off credit cards to increase your income. Ovation has tools to help you manage your budget more effectively.

Jun 22
0

Gain More through Frugal Living

By | Debt, Personal Finance, Save Money

Each day you spend more money than you realize. A few dollars here and a few dollars there is hard to notice, but it adds up quickly by the end of the month. If you’re getting to the end of the month finding it hard to make ends meet, you may need to embrace a frugal lifestyle, to discover what that can do for your bottom line.

There are several ways to live frugally and save money, without depriving yourself of the luxuries you’ve grown accustomed to. Choosing to be frugal does not need to mean restricting yourself to ramen noodles for every meal, and we definitely are not suggesting that you cut your water bill by showering once a week. You can embrace a more frugal lifestyle, however, by making the conscious decision to live without certain things or to do it yourself.

A less-than-thrifty lifestyle begins in the morning, with the purchase of a pastry from your favorite bakery on the way to work ($6-10). Then as your lunch break approaches, you and some coworkers head to a local deli or café for a quick meal ($5-12). As you are driving home from work, you swing through a fast-food restaurant to bring home dinner for the family, because you’re too tired to cook ($25-30). In one day you have spent $30 to $50 or more – and that is only on fast food!

You can make some fast changes to your lifestyle that put more money in your pocket:

  • Choose to make homemade muffins or smoothies for breakfast on-the-go each morning, rather than buying a pastry that not only costs more but is packed with calories.
  • Pack a lunch for work each day. Better still: pack your lunch, and walk to a nearby park during your break,  so that you can follow your meal with a little exercise.
  • Prepare meals for your family in advance for quick and healthy dining later on.

These simple changes not only save you money, but they also offer healthier alternatives. Neither your wallet nor your waistline needs items such as a gourmet coffee every day.

As well as making changes in where and what you eat, there are a number of other ways you can stretch your budget:

  • Rather than watching every new movie in the theater, choose only your favorites and wait for the others to be released on video.
  • Forgo the expense of movie popcorn, drinks and candy, and you will instantly save at least $20.
  • Consider carpooling, if you and your coworkers take a similar route to work. Not only will you save gas, but you can feel good about helping the environment.

Reflect on your daily habits and start with small changes. You will be surprised at how much more money you have at the end of each month, which can be put towards paying off credit card debt. Choosing to live frugally is more than a tool to save money; it is a step towards a better lifestyle.

Jan 27
0

Slay the Debt Dragon…or Better Yet, Make it Your Minion

By | Debt, Featured, Personal Finance, Revolving Debt, Save Money

We talk a lot about paying off debt and getting out from under large interest payments. Indeed, financial health and a good credit score make managing the financial surprises in life so much easier. It is important to remember though that debt isn’t the enemy – it is a tool.

Judicious use of debt is what allows us to live in a house where we can paint our walls and plant a garden instead of renting an apartment with loud neighbors and a nosy landlord. Utilizing a credit card for regular expenses you are going to make anyway and then paying off that card every month can actually improve a credit score (aka lower interest rates in the future) and rack up some frequent flier miles for a much-needed family vacation.

It is in using our available credit, being mindful of that magical 50% debt to limit ratio, and making timely and consistent payments that we get to fully utilize debt as a tool for bettering our lives. Having this tool available to us will help us ultimately realize our dreams of traveling through Africa, driving our own speedboat, or my favorite – Not ever having to pay an unreasonable bank fee again.

The question is: How do I get there? How do I turn debt around from evil dragon breathing down my neck to almighty sword available at my command?

The answer is:  It is hard work, it can take a long time, and there can be a frustrating feeling of sacrifice as we buy that used Subaru instead of a new Lexus. But consider this – Each and every one of those financially sound decisions is a building block toward financial security. Each time we opt to forego a third black sweater in the closet and instead make an extra $50 payment on a credit card, we place another solid block in the financial foundation of our life. When we make do with the computer we have for one more year and put a little extra away in savings, we secure a safety net for ourselves against the unknown.

These aren’t sacrifices – these are the stones we move to create a financial sanctuary where we are free to do as we like with our money. The three little pigs is more than a quaint children’s story, it is an allegory for how we can secure our future with some effort and frugal choices today.

Once we are in control of our finances, we have a full tool belt – sword and pet dragon included – for managing our future. Banks and credit cards will rally for our business. Car dealerships will compete for our attention with low interest rates and free extras. We will get to make our own decisions once again, and financial freedom is the ultimate reward.

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