Clear Debt Solutions as Clear as Mud

There are so many options out there when it comes to getting rid of your debt. You’ve probably seen your share of television commercials touting a company’s good record. There are also hundreds of companies doing business online, and I bet you get spam emails about eliminating your debt or improving your credit score. But you can’t really trust a company doing business online. Your financial information could be stolen, and you might get in deeper debt. There are a few things you can do without the help of an outside source to get yourself out of the hole.

Creating a budget is the most direct action you can take into determining where your money goes. If you document how much you make, you can then categorize and visually see what you’re spending your money on and how much money goes into each category. This way, you can also determine what is a necessity and what you don’t need in order to curb excess spending. In order to successfully pay off debt, you need a low debt-to-income ratio. If this ratio is any higher than 36%, you will have difficulty with trying to lower your debt.

I’m not telling you how to live your life, but you might need to change something in your lifestyle if you’re going to tackle your debt problems. If you have a lot of items sitting around your house and collecting dust, you might want to sell something to gain some quick cash. If you’re going to a bar every weekend and running up a large tab on drinks, consider staying home every once in a while. If you’re a heavy smoker, you know each pack of cigarettes comes with a hefty amount of tax, so maybe you should cut back or quit. By creating a budget and learning to control your spending, you can begin eliminating your debt.

Another clear solution to decrease your debt is making more than the minimum monthly payment. If your payment plan is amortized, you know you have to make the same payment every month. If you’re early in your payment plan, however, a higher amount of this money is paying off the interest, rather than the principal. If you can put some of your paycheck in savings and then use some of it to pay more than the minimum for a few months, you will lower the amount you have to pay in the long run. This strategy works great for school loans and mortgages.

These are some of the things you can do to gradually decrease the amount of debt you have. What is not a clear debt solution? Going to, of course. This deceptively-named company no longer accepts new clients because of numerous consumer complaints. Keep an eye out for these types of settlement scams when it comes to getting rid of debt.

David Pilley

David Pilley

David Pilley is a May 2010 graduate of the University of North Carolina at Chapel Hill, with a B.A. in communication studies and a creative writing minor. He is a native of Raleigh, North Carolina.

He played clarinet for the Marching Tar Heels in 2005 and 2006. He also volunteered for STV, the student-run television station at UNC-Chapel Hill, in the spring of 2010. He shot video, wrote scripts, and acted for “Off the Cuff,” UNC’s longest running sketch comedy show. He has the rare distinction of having lived in a dorm all four years of his undergraduate college career. He was also on Franklin Street on the night of April 4, 2009. His future plans are to pursue a master’s degree in journalism and to one day work for the media as a sports journalist or broadcaster.

Being one of eight children, David realizes finance is an important topic to everyone, regardless of his/her knowledge of the subject. His interests are in personal finance, budgeting, and savings.

In his spare time, David enjoys watching sports and standup comedy, as well as doing crossword puzzles and writing in the first person. He also thoroughly enjoys trivia and, one day, hopes to participate on the game show Jeopardy!, where he will try to break Ken Jennings’ 74-game win streak.
David Pilley

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