Archive for Debt

Tips on How to Stop Accumulating Debt

Learn the tips you can take to stop accumulating debt now!

hands in the air sinking into an ocean

As a consumer, you know it is very easy for you to have debt. It might take a very short time for you to have thousands of dollars in debt, and what is worse is when it comes time to pay them off.

Debt cases are increasing every day worldwide. It is very hard for people not to get into debt, especially when one has too many responsibilities that require money, such as education and health.

Even though having a little debt is not a bad thing, you can prevent yourself from accumulating large amounts of debt.

There are times when we need to make a purchase for our comfort and health needs.

For example, we might need a new mattress to get our good sleep. The smart thing is to look for a sale, such as a Black Friday mattress sale, and try to pay for your purchase in full. If we can’t pay for it in full, then try to get it paid off as quickly as possible.

Types of Debt

Did you know there are different types of debts? Well, there are good debts and bad debts.

Debts that are regarded as the bad ones are those once taken are accompanied by a huge percentage of interest. For instance, if you purchased an item through debt, you will pay more than the original cost due to the huge amount of interest. Bad debts can hinder you from getting loans when you need it.

The debts referred to as the good ones are the ones, if taken, will add more value to you in the future, such as loans to get an education and buy a house. This kind of debt usually has small repayment interest.

Reason Why People Go Into Debt

To understand the best strategy for you to prevent debts, you must know why people get into debt. Some of the most common reasons include poor spending techniques, medical expenses, reduced income, and inadequate saving methods.

Strategies You Can Apply to Avoid Accumulating Debt

The following are some of the best strategies that you can apply to avoid or to get out of accumulating debts. If you’ve already accumulated debt, learn what you can do if you have too much debt

Never Buy Anything That You Can Never Afford

Buying assets such as a home is one of the major decisions that one can make financially if you are not careful to make a wrong decision. You probably can qualify to take a loan to buy that home, but you should never be in a rush; instead, think through your decision and ask yourself if you can afford the loan you are about to take.

You should know that you should never spend more than thirty percent of your monthly income on repaying a loan. Instead of buying a big house, it is advisable to buy a small house that is not stressful to raise money to reduce the risk of having accumulated debts.

Read: the value of sensible debt.

Live Below Your Income

When you have to purchase something such as a car or a house, you must take a loan to purchase it. You can decide to do away with or reduce some items you buy for a month or year.

You can eliminate your monthly subscription services, do away with entertainment, and other unnecessary spending. Cutting down on some things means that you will save more and you will be able to afford important items without getting into any debt.

Apply for Scholarship

If you are a student, education is very important, but you can apply for a scholarship instead of taking loans to facilitate it. Even though having a loan to ease your education is good debt, you do not have to accumulate debt that you will fail to pay in the future.

If worse comes to worst and you fail to get a scholarship or a sponsor, you can apply for part-time jobs to raise money to facilitate part of your education fee.

Get Good Insurance

In recent years, one of the major causes of having huge debts is health. Even though no one wishes to sick, it important for you to be prepared because no one knows what can happen tomorrow.

If you fall sick and aren’t prepared for it, you can get into huge debts that might be very hard for you to get out of. If you invest in a good insurance policy, you stand a chance of reducing future debts should you fall sick.

Learn how to save money on health care costs

The good thing with the insurance is that you do not have to deposit thousands of dollars. You have to come up with a good plan where you can be depositing a few dollars a month, which can save you big time in the future.

If you wonder how you can avoid accumulating debts, then wonder no more as the above tips will help.

Get Out of Debt in 5 Easy Steps!

Have you had problems with debt in the past? What have you done to relieve them? Comment below and let me know!

Mistakes to Avoid when Dealing with a Debt Collector

Debt collector

Have you ever been harassed by a debt collection agency? The fault might be yours. There are ways you can avoid being a victim of debt collectors willing to go to any length to recover their client’s money.

Debt collector

By being harsh on you, a debt collector is just doing his/her job. They are known to have an aggressive attitude towards people who hold or refuse repayment. This sounds quite fair. But there are times when a debt collector may take you for granted and treat you in an unfair way. This is why you should avoid making some common mistakes that debtors make.

Avoid the following mistakes when dealing with a debt collector.

1. Engaging the debt collector on the phone

To save time and effort, the debt collector hired by your creditor might call you on your phone to have a dialogue. Do no absolutely engage them on the phone. You can ask them for a meeting or provide your email address for further communication. Debt collection agencies are clever when it comes to collecting evidence that can frame a debtor as the culprit. They might find use the recorded phone call against you in court.

2. Sharing personal information

Sharing personal information with a customer care executive via phone is never a good idea. The executives at your creditor’s debt collection agency will try to contact you via phone/email/in-person to retrieve your personal information. This does not necessarily mean they will use it to steal your identity but they will surely keep it as collateral to attack you when your back is against the wall. 

3. Failing to get agreements in writing

Even if the debt collector agency is willing to settle for an amount lower than the principal amount(that you owe your creditor), ask the debt collector to produce everything in writing. Do not accept a digital copy of the agreement. Debt collectors are notorious and will try to come back at you to recover more money.

Secondly, even if you build a rapport with the debt collector, a legal written agreement is a must for whatever transactions you do with them. You can’t rely on their word. What if the representative you spoke to quits his job or joins another company. You don’t want to do the dirty work of tracking them to confront in a hostile manner.

4. Not knowing about the statute of limitations

Every state in the United States has its own statute of limitations– as far as debt repayment is concerned. If your creditor fails to recover his money within the given time frame, you can get away without paying the debt. Basically, due to negligence or inefficiency of the debt collection agency, your debt can be legally waived off. So, do not respond to the debt collectors threats if the time limit of repayment has already passed.


Realize that the debt collection company buys the debt owed by you to your creditor by paying a certain percentage of the principal amount in advance. So, you no longer have to worry about your creditor. But the agency will put pressure on you to pay the full amount that you owe. Do not fall for their tricks. Always negotiate and settle for an amount that you find reasonable.

What to do if you Have too Much Debt


Are you drowning in a sea of student loans? Do you have too much credit card debt with the interest rate piling up?

Being in debt can be stressful and can cause a lot of anxiety/worry. It is due to this anxiety that people don’t even bother getting their financial problems fixed. Every time something reminds them about their debt they choose to run away from it; in an attempt to ease some mental pressure.


Here are a few tips that will help you deal with the stress of being in debt and also get out of it as soon as possible.

1. Find ways to earn more money

?How can I afford it?? opened up the brain and forced it to think and search for answers.?

? Robert T. Kiyosaki, Rich Dad, Poor Dad

Most people(who are in deep debt) are less likely to change their spending habits and lower their standard of living. If you are one of these people, then getting out debt should consequently be easy as you have the leverage to work hard and earn more money.

If you are not the entrepreneur-type than consider getting another job that pays well in the short term. Many jobs pay well and don’t require much physical effort. The formula to pay off your debt is quite simple. Earn more, pay off your debts and continue to live a flamboyant life.

2. Live frugally

Living frugally is another thing you can do if you have too much debt. Some cultures like Chinese, Indian and Japanese are purely based on living a minimalistic life and finding joy in things that are naturally available to for free.

Consider learning about these cultures and cut down your spending by 60-70 percent. You can use the saved money to pay off your debt and become free in no time.

3. Debt Management Plan

If you have too much debt and managing it by yourself is not possible then you should sign up for a Debt Management Plan. Debt Management companies work with lenders and creditors to lower your overall debt. They also help you lower your interest rate and negotiate a longer repayment plan. This plan is a blessing for people who don’t understand personal finances that well and are in a desperate need for help.

4. Personal Bankruptcy

This is the final solution and should be exercised when you are left with no other options. Most people declare personal bankruptcy when they run out money or their business fails and they have no source of income left. Declaring bankruptcy will clear most of your debt but some debt-types like alimony/child support are nondischargeable.


Getting out of debt may seem like a huge mountain to climb but it is not that difficult. The best way to clear your debts as fast as possible is by changing your spending habits and seeking advice from a finance expert. Once you know how much debt you owe to every creditor, it becomes easy to follow a payment schedule; which will work as a reminder so that you don’t forget to pay your bills on time.

3 Options for People Dealing with Debt

Dealing with debt

Being in debt is not unusual in today?s economy. A number of people suffer from hefty student loans, owe money on their homes, or are struggling with credit card debt. Often, it?s not even a matter of overspending, but rather just the fault of circumstance and harsh economic times. For many, it?s a living nightmare that constantly plagues their every thought to the point that they are afraid to answer their phone because it might be a call from a collection agency.

Dealing with debt

There is a light at the end of the tunnel, though: people like the Counsellors at Credit Canada Debt Solutions can help you make the right decisions when it comes to paying off your debt. They?ll walk you through a few options like the ones below.

Debt Consolidation Loans

A debt consolidation loan is when you ask a lender to take on all of your unsecured debt (credit cards, personal loans, bills, etc.) as a single, combined loan, allowing you to pay less interest over time. If you apply with major banks or a credit union you will receive a number of benefits, including:

  • Single monthly payments
  • Often a lower, set interest rate
  • Generally no fees

While consolidating your debt with a bank or credit union can help you pay it off faster, there are also disadvantages. For example:

  • You need a good credit score to be approved
  • Collateral like property or other assets may be required
  • Interest rates may be high, especially if you are a high-risk borrower
  • Access to credit allows you to continue to accumulate debt

Unfortunately, even if the debt gets paid off using a debt consolidation loan, poor spending habits will put some people right back where they started, or worse. That?s where a Credit Counsellor can help.

Debt Consolidation Programs

Unlike getting a loan from a bank or credit union, a Debt Consolidation Program or DCP involves working with a Credit Counsellor who will consolidate all of your unsecured debt into a single monthly payment. They will also negotiate with your creditors to eliminate or reduce interest and work with you to put together a payment plan, guiding you every step of the way. You can also expect:

  • Interest relief in many cases
  • Lower single monthly payments
  • Easy transfers by telephone banking, debit card, or money order
  • Automatic and tracked payments to creditors
  • Qualified counselling and coaching

Imagine having someone on your side providing judgement-free advice and there to stop creditors from constantly calling you. Credit counsellors are ready to fight for your best interests.

Consumer Proposals

A consumer proposal is when you make a legally binding agreement through a Consumer Proposal Administrator (or Licensed Insolvency Trustee) to pay off a portion of your debt to your creditors. You?ll receive immediate protection from collection companies, interest accumulation will cease, and the payments will remain the same even if your income increases.

The problem with consumer proposals is that they, like bankruptcy, are considered a form of insolvency and will show up on your permanent record. It can also be difficult to qualify for because you need a good paying job with a steady income.

Which Works for You?

You definitely have options when it comes to paying off your debt, but a Debt Consolidation Program is generally your safest route. With a certified Credit Counsellor you?ll have the support you need to achieve your goals and pull yourself out of financial misery.

4 Tips to Get Ahead of Credit Card Debt

credit card

?Compound interest is the most powerful force in the universe?. Whether or not the world?s most famous scientist, Albert Einstein actually said this remains up for debate. However, the fact of the matter is; compound interest is indeed one of the strongest forces in the world. So strong in fact that it has the capability to make or break a person.

credit card

Credit card debt, in particular, has driven many people to bankruptcy or even worse. But fret not, as there is hope. With the right management skills and a little discipline, you?ll be able to quickly dispense of your credit card debt.

Here, we take a look at 4 of the easiest ways for managing credit card debt.

1. Start paying off your debt!

While many may argue that this is easier said than done, Laozi; a famous Academic once said that ?a journey of a thousand miles begins with a single step?. Get started on your way to a debt-free lifestyle by making above minimum payments on your existing credit card debt.

By paying above the minimum amount, you?ll be able to pay off existing interest charged while reducing the size of your debt at the same time. On the long-term, you?ll find that you?ll pay less in interest owed and this gets you into the habit of making payments on time.

Dragging out your credit card debt only means being in the red for a longer period of time, while giving banks the opportunity to make more off you.

2. Dial it all back

In today?s age of social media and instant gratification, one is constantly bombarded by images of acquaintances living the ?perfect lifestyle?. From exotic beach holidays in Bali to fast cars and fancy restaurants, it may be tempting to try and keep up with your ?jet setting? friends. After all, you only live once right?

Wrong. Saddling yourself with crippling credit card debt is a quick way to ruin your life and credit rating. All of this just to impress your Instagram followers?! We think not.

Instead, skip the dinners out and learn how to cook yourself a delicious meal. Looking to go on vacation? Sure, pay for it with cash. By forking out cold, hard cash on your purchases, you?ll be much less likely to splurge on extravagant expenses that you don?t need.

On the long-term, you?ll find yourself getting used to paying everything with cash while minimizing your debt exposure. With a little discipline, you?ll be able to enjoy financial freedom without becoming a slave to debt.

3. Consider taking on a balance transfer

One effective way to prevent your debt from ballooning any further is with a balance transfer. In a nutshell, balance transfers allow you to transfer existing credit card debt to a new card that charges little to no interest.

This allows you to pay off your debt without having to worry about exorbitant monthly interest charges while allowing you to pay off your debt without any pressure.

A word of caution though; 0% interest does not mean that you should spend to your heart’s content. Preferably, the balance transferred to the new card should remain as such with monthly repayments being made.

4. Take on a side-gig

Okay, so you?ve found yourself underwater with a sizeable credit card debt. So why spend time fretting over it when you could get a side-gig to help pay off your expenses. From writing articles to designing brochures and even getting a part-time job, searching for alternative sources of income is an excellent way to scrape together the funds to pay off your debt.

Lacking the required skills? No sweat, there are dozens of websites which pays you for completing surveys allowing you to make money with a PC and internet connection.

For the ambitious, you could even earn some extra money punting on horse racing. Follow the latest events in the horse racing schedule and try to cash in some money. Just remember to not gamble more than what you own, because it can increase your debt. Betting on sports should be done wisely and in small amounts, so even if you have less profit, you will also have less chances of losing money.