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Guest Post – How to pay off debts and take control of your financial situation

February 11, 2011 · Filed Under Paying off Debt · Comments 
Ryan Smith is a contributory writer associated with the Debt Consolidation Care Community and has written several articles for various financial websites. He holds his expertise in the Debt industry and has made significant contribution through his various articles.

In order to take proper control of your life it is very important that you keep a good control on your finances. This means that you must take good control even on your debts and make efforts towards paying them off.

Some tips that you may follow in order to take control of your debts are as follows.

1. Lowering the debt to income ratio: It is very important for you to lower your debt to income ratio. This is because the debt to income ratio is a reflection of your financial state. Most lenders will check your debt to income ratio along with your credit report. In case you have a very high debt to income ratio you may be denied loans. This will have a very bad effect on your financial life. Thus, you are to try and lower your debt to income ratio if the ratio is more than 30%. This will help you take control of your financial life.

2. Setting up a debt repayment plan: If you want to get out of a financial crisis and maintain a healthy financial life, then you will have to pay off your debts. In order to do so you must set up a debt repayment plan. The purpose of formulating such a plan is that it helps you to concentrate all the extra amount of money that you have and use it to pay off your debts. Another advantage of setting up a plan is that the process of debt repayment will be faster than it would have been otherwise.

3. Paying off all your old debts: One of the ways in which you will be able to come back on track is by trying to pay off your old debts. In order to do so you may approach a single company at a single time and gradually pay off your debts. As you keep on paying off your old debts you will be improving your credit score as well. This helps your financial situation greatly.

4. Stopping the usage of credit cards: It is very easy to get into credit card debts because you will not be able to realize that you are sinking into debts until it’s too late. Thus, when you face a financial difficulty and want to take control of your finances, then you will have to stop using your credit cards.

These are a few things that you can do in order to pay off your debts and take control of your financial situation.

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Comments

28 Responses to “Guest Post – How to pay off debts and take control of your financial situation”

  1. Jason on April 11th, 2011 1:42 am

    Great article. We finance bloggers need to stick together.

  2. Dan - BankVibe on May 2nd, 2011 8:00 am

    Good post, but I’d reconsider “stop credit card usage” it should be “manage credit card usage wisely.” If you pay attention to fine print and make payments IN FULL every month you can actually gain a lot from certain cards. Find ones geared towards cash back on everyday items like gas, groceries, etc. In my experience, if you use cards just for essentials then you actually can save a good deal each month…

  3. Annie on May 22nd, 2011 5:35 am

    This is a nice tips on avoiding debts and taking control of financial situation. It is a good thing that I don’t have a credit card. But I should have to think of financial plans for my future.

  4. Jack on May 24th, 2011 7:16 pm

    I don’t use credit cards anymore! Got myself into big trouble but now I am debt free!

  5. John on June 14th, 2011 9:37 am

    @Jack – congrats on extricating yourself from trouble and getting debt free!

  6. Wood flooring NYC on July 24th, 2011 5:31 pm
  7. silver dollar coins on July 26th, 2011 4:09 pm

    yes, “manage credit card usage wisely”! It is a better advice than STOP credit card usage. I personally do not use anymore credit cards but I have to do it because this is the DAYS we live in.
    .-= silver dollar coins´s last blog ..Why investing in SILVER is BETTER than investing in gold =-.

  8. Gary on July 28th, 2011 5:45 pm

    One thing a lot of people forget to do is start thinking about ways to earn more money. It’s a lot easier to pay down debt when you’re making more money. Believe me!

  9. Dan on July 28th, 2011 5:50 pm

    Stopping credit card usage is probably the best thing we can do to improve our financial situation. People don’t realize the effect of that 18-19% ( or even 9-10% for low interest cards) interest fee. You’d be amazed how much things cost when you factor in the interest charges.

  10. Money Corner on August 8th, 2011 12:39 pm

    When you get too far into debt and find out that it can’t be paid back, it’s always best to stop there and then and try to arrange a payment plan with the creditor both that you can afford and one that they’re happy with!

  11. Kerrie Setiawan on August 12th, 2011 2:49 am

    Financial education is what we need to learn to manage our money from a young age. If only, they’d teach it at school.

  12. Max on September 29th, 2011 1:10 am

    A person should kept these guidelines in his mind in order to get out of debt. Everyone want to get rich, but he can’t do that by borrowing money and getting credit cards hence, it will be the cause it his downfall.

    Max
    Webmaster, Perfume with Pheromone

  13. Individual Voluntary Arrangement on October 13th, 2011 8:34 am

    Great and informative post, I really impress with your post.

    Thanks for sharing with us.

  14. Education Degree Program on October 19th, 2011 5:57 am

    These are very effective tips, one must use to avoid debts. Setting goals are also very effective in trying to take control over finances. Thanks for such wonderful post. I would recommend my friends also to read it. Really its very helpful.

  15. Jonathan on October 23rd, 2011 2:04 pm

    Stopping the use of credit cards can be a very effective way, but sometimes just using them differently can be even better. I got a cashback credit card that pays me 1% on anything I spend. I never spend more than what I already have in the bank and so this is an example of making a credit card work for you.

  16. Charlie on October 25th, 2011 9:47 am

    Setting out a plan will give you a goal to work towards and also an indication of how long it will take to repay what you owe. If you can manage to use a credit card wisely and repay it in full each month like ‘Dan – BankVibe’ said then your credit score may improve.

  17. Jonathan on November 15th, 2011 12:21 pm

    Paying down debt is THE most important facet even above saving money. Average interest rates are so high on loans and credit cards that it makes paying down debt even more important than ever. The credit crunch has taught us that we have to be responsible in our debt committments

  18. Jonny Debt on November 16th, 2011 7:46 pm

    Debt consolidation through reputable non profit organisations can be a real help as they often have the expertise to negotiate debt down for you.

  19. Darren on November 19th, 2011 9:02 pm

    Very useful and effective tips indeed. We need to stay out of debt or else it will ruin our financial stability.

  20. Static Site Design on November 29th, 2011 3:50 am

    Can you really get out of debt paying less than you owe?

  21. Fred on December 16th, 2011 6:45 pm

    Instead of debt to income ratio I figure the number of years it would take me to pay off my total debt. I try and keep this always under 5 years and preferably just 2-3 years.

  22. compras coletivas on December 19th, 2011 3:01 pm

    Love yout post

  23. Gurjit Singh on December 21st, 2011 5:33 pm

    This is very good advice that we try to follow. I don’t think it’s possible in this day and age to be totally debt free but trying to keep it under control is a good goal.

  24. Gregg Singer NYC on January 5th, 2012 5:28 am

    I think if you want to get out from a financial crisis then your debt repayment plan should be clear. Along that paying off all your old debts because it will help in order to maintain your healthy financial life.

  25. Aryo on April 20th, 2012 5:22 am

    Wow… nice info…
    very very usefull :)
    Thanks for sharing

  26. Rob Oskins on May 24th, 2012 10:36 am

    Here’s another people don’t think about — review your current services and bills. For example, do a review of your phone services. Maybe there is now a better plan that will save you more money. You’re also no longer stuck with one company for your electricity services. A friend switched and saved a bundle.

  27. Marathon Energy on June 13th, 2012 1:07 pm

    Getting rid of debt is always a good ideas. Even looking for ways to shed costs on utilities and common bills like those can add up in the long run. Nice informative post.

  28. IVA on June 26th, 2012 8:00 am

    Debt management is always an issue. To have the debt management done through efficient ways, one has to look for different debt management companies which provide the best alternatives like IVA, DRO, and keep you away from the disastrous bankruptcy. This is such a nice post… Thank you for sharing :)

    Regards

    Alisa

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