Word of Advice for Debt Novices

Prevention is better than cure, of course, it is. Curing a disease is a long, hard process which involves tracing the root of the problem as well as the underlying implication and causes of the problem. When we say debt is a disease, this is exactly why we think that. Debt cripples your ability to think clearly and to live your life to the fullest mental and experiential capacity. Debt is the cause of many other problems that are completely avoidable with merely healthy financial habits. If you are a debt novice, then there are chances that you have not yet experienced the crushing debt that compel people to declare bankruptcy or take loan after loan just to pay the previous debts back. You might also be unaware of what a menace the credit collectors can be. Their calls can be a klaxon of anxiety and flight response within even the strongest psyches.

If you have not fallen into the pit, here’s a word of advice for you straight from the debt experts. Take care of your debts and keep a log of everything. The habits of overspending that might not be a big threat now will turn out to be the biggest hurdles to overcome in the near future. The one month delay over the payment of credit card debt will carry over to two months and before you know it, there will be a debt collection agent calling every day and your credit score will be somewhere near the ocean floor. As it was mentioned earlier, the best way to mitigate debt is to be critical of all your actions and causes of your debts. You must overcome personal hurdles and inclinations to spend more. Be smart about your financial future and you will remain a debt novice.

Easy Ways to Maintain a Budget | Financially Insecure Folks

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Budgeting-Budgeting-Budgeting. It is the one word which is the bane of existence for all the debtors and financially insecure folks. We know it is hectic to turn anywhere for financial advice and just read the word budgeting. Budgeting is termed as the simplest way to get out of financial trouble. According to experts, you can save a major chunk of your earnings as well if you just budget correctly. Even our knowledge hub hosts multiple entries on why budgeting is necessary. While we are sure you get the gist, you might be a little lost as to how to effectively budget without living hand to mouth. The key points can be found easily on our knowledge hub, but this entry tells you in better detail just how to maintain and formulate a perfect budget.

For any self-respecting adult, a budget should not be a scary word. It should be a given when considering the care and maintenance of finances. Budgeting will only help you if you integrate it fully in your life. Don’t let it go out of hand with wasteful expenditures. Money is easier to track with a budget. Non-essential expenses can be pointed out in an instant and any wasteful expenses can be flagged and so you have a feeling of being financially insecure. The essential expenses are put into perspective and even those can be optimized by techniques like bulk-buying or bargain hunting. It is a rule of thumb that these essential expenses should not cost more than half of your total expenditures. This leaves room for emergency expenses and insurance payments.

The rest of the income should be divided up in the following pattern. 10-20% of your income should be designated for investments and future savings. This can include a retirement fund if your employer doesn’t have any arrangement in place or if you aren’t investing in a government-backed retirement scheme. A separate emergency fund of at least 10-15% of your remaining income is also a necessity that saves you from borrowing cash any time the need is dire.

Living below your means is also important when you have a budget in place.  Avoid overspending and plan elegantly. This is the first step to financial independence and security.

2020 Guide to Debt Management Plan

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The history of debt financing is as old as mankind itself. Every enterprise that seeks expansion and every individual who requires external finances has to go through the hurdles of debt financing system. While the procedures of acquiring and utilizing debts have changed over the years, the management plans have also evolved to encapsulate the demands of an evolving marketplace. DMP, also known as the Debt management plan, was originally a County Court order initiated for borrowers to help repay debts. This was specifically designed for borrowers who were unable to manage the repayments of principal amount as well as accrued interest. In this scenario, the finance or loan groups that had bequeathed the loan, sought to retrieve it, hey would contact the courts. The Court would then deem the borrower’s monetary position insufficient to repay the debt amount. The procedure would dictate that they take into account all the outstanding debt and normal financial commitments to formulate a manageable amount and tenure to reimburse all debts. This was drawn up after considering the fact that borrower still manage to pay on-going responsibilities including rent, utilities, food and vital bills required to live and compensating for those obligations.

What does the Debt Management Company do?

Debt Management Company is the entity which makes debt management plan of how you can repay a debt. The specialty of many DMCs is large amounts of debt that are consuming most of the borrower’s budget and are extremely hard to pay back. Whenever presented with a case, the DMCs perform the following steps:

  1. List down of all the creditors & calculate outstanding debt.
  2. Complete reports of incomings & outgoings cash flow per month.
  3. Ascertain disposable income /pro rata among creditors. Pro rata means that every creditor gets an equal proportion of amount owed.
  4. Final stage is forming up the DMP and requesting them to freeze interest so the plan goes as planned.

Where Does Solution2Debts come in?

While many companies provide substantial debt management plans, there is an evident lack of personalization and creditor-satisfaction. Every borrower needs a company that understands just how precarious this situation is and deals with it delicately. Solutions2Debts is the iva platform that checks all these boxes easily and successfully. Solution2Debts is responsible from Step 1 to Step 4 for the convenience of consumers. It understands the importance of an effective plan for its customers because a debt free life is a blessing. Financial freedom is what it takes to have a good standard of life without getting pinged by creditors at your back. Solution2Debts provides that and so much more. Every consumer is provided a customized and personalized plan with heavy interpersonal interaction during the whole process.

How the plan will work?

Solution2Debts has a simple way of making its plans work perfectly. You will be provided with the details of following topics:

  • The overall cost of the plan every month
  • The total cost you’ll repay over the entire time period
  • How long you will be paying the plan till you have repaid all of your debt
  • How much the total cost will be
  • What amount will you pay to the iva debt management company

In most cases, if the employer remains in negotiations with any of your lenders, then they have to make sure that any proposed figures are estimates before entering the final contract.

This is how iva and Solution2Debts work productively for the betterment of the customers. Subscribe and follow us to learn more about effective debt repayment and how much Solution2Debts helps the borrowers in your community.