We recently read a survey which prompted the writing of this post. This web site is dedicated to helping readers manage their debt and to also manage their savings. Consumers need to get involved and take control over their debt and savings to ensure they have a satisfactory financial future. No one else will do it for you.
We hope you read this post and can make use of the information as well to take control of your financial future. Failure to act or failure to deal with your debts is only going to cost you more money in terms of interest at the very least and at it’s worst, could push you into bankruptcy!
How to Reduce Debt – Survey
The survey is summarized as follows:
A recent survey indicates that consumers are not taking advantage of available tools and strategies to reduce and pay down their debt.
The reasons given are interesting.
- The overall amount of debt that they have
- Interest rates they pay on their debts – despite interest rates remaining at near historic low levels.
- The number of different debts they have as a barrier to debt freedom.
These are all valid reasons for the respondents, however if allowed to continue will stop them from not only paying down their debt quickly, but also cost them much more money as a result of increased interest charges. Not getting involved and taking charge will possibly hurt you over a life time financially.
What are the tools available to consumers?
These tools include:
- Consolidation of their debts at a single low interest rate.
- Making extra payments on their mortgage.
- Compare mortgage products from more than one lender the last time their mortgage came due.
- Work with a professional financial adviser
- A debt repayment plan that includes a specific date for when they expect to be debt-free.
More detail on each of these tools:
Consolidation of debts at a single low interest rate – with interest rates so low at the present time, it only makes sense to consolidate all of your debt into a single low interest rate personal loan or secured mortgage. Interest payments will be less and more of your money will go towards paying down the debt.
Making extra payments on their mortgage – even a single payment once a year can wipe thousands of dollars in interest of your mortgage and years as well off your mortgage. This is a great way to reduce interest and reduce your debt at the same time.
Compare mortgage products – Whether you are consolidating or just renewing a mortgage, a little competition between mortgage companies can sometimes save hundreds if not thousands of dollars. Shop around and let your current provider know so they have an opportunity to sweeten the pot.
Work with a professional financial adviser – if you are confused or overwhelmed with your current debt situation and / or savings, speaking to a financial adviser can sometimes help. They can look at your situation without any emotion, focus on the facts and make the appropriate recommendations. Get two recommendations from two different advisers to avoid any potential of conflict of interest.
A debt repayment plan
Develop a debt repayment plan in conjunction with the above strategies that indicates what debt will be paid off when. Include what debts should be consolidated and what your long term debt plan will be. Your financial adviser can help develop this plan, however in the plan must be yours and adopted by you.
Reduce your debts now , by consolidating, low interest loans, make extra payments, comparing loan or mortgage products, working with an adviser and setting up a plan. It may take a bit of work. However in the writer’s experience nothing comes easy unless you put some effort into it.