Freedom Debt Relief Reviews Steps to Take if Debt Piles Up

Dealing with debt can be very difficult – doubly so when debt collectors are calling your phone at all hours of the day. The problem is that managing money is not a skill that’s taught in schools today – people are instead expected to figure out how to manage their own finances with little experience.

It is no surprise that Americans become riddled with debt, but the good news is that digging yourself out of debt becomes manageable with a few easy steps. To help us understand the most effective strategies, experts from Freedom Debt Relief review steps that have helped people rid themselves of debt.

                       

Evaluate Existing Debt

Most people who have enormous amounts of outstanding debt usually have it distributed across several different sources. The most valuable first step is to understand your debt – who you owe money to and how much.

Freedom Debt Relief reviews that writing down all sources of debt is one of the most important first steps that can be taken to tackle debt. Make sure to list out the important attributes of debt: outstanding balance, APR (interest rate), and minimum payments.

Once all your debt is on paper with attributes filled out (make sure to copy interest rates exactly as they appear in your debt), you can then begin to understand the minimum payment needed each month across all your debts to not incur extra costs.

The most important step here is to understand how your debt will accumulate over time for each line of debt. It’s recommended to pay each monthly amount owed in full, but in the event this cannot be done, paying off the debt with the highest interest rate is the most important step – as debt with a higher interest rate will spiral out of control the fastest.

Make a Payment Plan

Once you know exactly how much you owe, it’s essential to create a plan to tackle the debt. The creation of a payment plan takes two factors into account: the minimum payment amount for debt and the maximum amount of money you can contribute each month to payments.

From there, you need to assess how much money you can feasibly contribute towards paying off debt. Keep in mind that paying just the minimum amount for debt will mean that the process of paying off debt will continue for a very long time. In the long term, you will actually save money by paying off debt as quickly as possible.

To make a rough estimate of how long you need to stick by your plan, you can use the following equation:

Debt / Monthly Repayment = Number of Months until you are debt free

Pay off Highest APR Debts First

When it comes to paying off debts, make sure to try and pay off the highest APR debts first. To do this, make the minimum payment possible for all debts except for the one with the highest rate.

This strategy allows you to focus on the debt with the largest impact first, which means paying off debt will only become easier over time. Freedom Debt Relief reviews that the steps listed above are steps that are available to everybody and should be the bare minimum when it comes to tackling debt.

Yes – while it is possible to refinance some debt or open up a new credit card with 0% APR, those avenues may not necessarily be open for everybody. When it comes to managing debt, there is no magic bullet or easy way out, short of a miraculous event like winning the lottery – not an event you want to bet on happening.

Eliminating debt comes down to strict financial discipline and planning – the process is not easy but it is something that everybody can do if they maintain discipline and stick to a plan.

The good news is that once one debt is paid off, it makes more money available to pay off the next debt. Assuming that the same amount of money is spent each month to pay off debts, the idea of snowballing will make paying off the next debt faster.

Reduce Unnecessary Expenses

There are additional steps that can be taken to further reduce debt – but it can require living a very frugal lifestyle, a change in mindset, or outside help. One of the best ways to free up more money to pay off debt is to reduce or curb unnecessary expenses.

The experts at Freedom Debt Relief review the importance of combing through monthly expenses, to understand how money is being spent and where expenses can be cut. More importantly, reviewing expenses can give insight into expenses that are no longer valid – such as subscriptions to old services or expensive payments that could be renegotiated or reduced.

One of the largest expenses is associated with vehicles – nicer cars have a price tag that is often not readily apparent: higher insurance premiums, lower gas mileage, or most expensive repair costs all make for a higher cost of ownership. If your vehicle is causing too much of a train on your finances, consider trading it in for a less expensive model – which makes your monthly expenses lower and gives you a chunk of cash that can be used to pay off debt.

Dealing with debt can be a daunting challenge, but with strategic planning and disciplined execution, it is possible to regain financial stability. The key steps involve thoroughly evaluating existing debt, creating a comprehensive payment plan, and prioritizing debts with the highest APRs. Understanding the full scope of your debt by listing all sources, balances, interest rates, and minimum payments provides a clear picture of your financial obligations and helps in devising an effective repayment strategy.

Implementing a payment plan that focuses on paying off the highest APR debts first ensures that the most expensive debts are tackled quickly, preventing them from growing uncontrollably. This approach, recommended by experts from Freedom Debt Relief, highlights the importance of financial discipline and consistent payments to gradually reduce the overall debt burden.

In addition to structured repayments, reducing unnecessary expenses plays a crucial role in freeing up additional funds for debt repayment. By critically reviewing monthly expenses, eliminating non-essential costs, and possibly downgrading high-maintenance assets like expensive vehicles, individuals can find more money to allocate toward paying off debts.

Ultimately, while managing debt requires determination and adherence to a well-thought-out plan, the rewards of financial freedom and reduced stress are well worth the effort. With consistent effort and careful financial management, achieving a debt-free life is an attainable goal.