If You’re Living With Debt, Turn Tax Season Into an Opportunity
Many see tax season as a negative, but on the positive side it presents a unique opportunity each year for individuals to take charge of their bank accounts and plan steps to strengthen their financial health.
Freehold, NJ (PRWEB) April 5, 2006 -- Many see tax season as a negative, but on the positive side it presents a unique opportunity each year for individuals to take charge of their bank accounts and plan steps to strengthen their financial health. However, this exercise can be very difficult – to the point of denial and despair – for those living with debt.
“Debt can be very crippling psychologically, emotionally and financially” according to Diane Gray, Director of Education at Novadebt. “There are many negative feelings, including helplessness, that can hinder a person from taking the first steps to becoming debt-free.”
According to Gray, the time to take control of debt is immediately in order to stop additional fees from interest rates adding to the problem. Below are some recommended first steps towards assessing your situation and eliminating debt:
1. Accept Your Debt, You’re Not Alone – The average credit card debt per household is roughly $9,000, not including mortgages and home equity lines of credits.
2. Stop The Debt Flow – Lowering your credit expenditures, preferably ceasing them altogether to the extent possible, is absolutely necessary. It’s highly recommended that if it takes physically cutting up your credit cards to stop or limit unnecessary spending, do so.
3. Quantify: Total Debt/Total Income – Vagueness will only make your situation feel worse, particularly if you feel you owe “a lot of money” when you don’t make “a lot of money.” When you know the exact amount of debt you owe and monthly resources you have at your disposal, it will be easier to make realistic goals and steps to reducing that debt.
4. Prioritize Your Payments – If you have debts that are small and closer to being paid off, you may wish to tackle these first. Long-term loans with lower or fixed interest rates, such as student loans, will not harm your finances in the long run as those with higher, varying interest rates.
5. Resources: Consider Consolidation – Approximately nine million Americans each year have contact with a credit card counseling agency. These agencies help negotiate with creditors to lower rates and manage maintainable payment goals. Consolidating your credit card debts with an accredited nonprofit consolidation firm does not affect, nor often times even appears, on your credit report.
Novadebt is a nonprofit credit counseling agency that helps those with financial difficulties regain their footing. For more information and free budget consultation, call Novadebt toll-free at: 1-800-772-4557. Certified credit counselors are on call to determine a personal financial plan to suit your unique needs.
Since its inception in 1991, Novadebt helped over 250,000 people to regain their financial footing and repay approximately $340 million to their creditors. Novadebt maintains an average active caseload of approximately 15,000 consumers at any given time. A non-profit, social service agency licensed and bonded by the New Jersey Department of Banking, Novadebt is a member of the Association of Independent Consumer Credit Counseling Agencies (AICCCA) and the Better Business Bureau. The United States Government recognizes Novadebt as a charitable organization under 501© (3) of the IRS Code. All of the agency’s counselors are certified by the Institute of Personal Finance.
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