Our 4 Expert Tips For Dealing With Debt In the New Year
Millennials catch a lot of flack about their social media usage, work ethic, and spending habits, but the truth is they’ve faced economic challenges that Baby Boomers and Gen Xers never did. The financial collapse in 2008 happened just as most millenials were entering an awful job market and the student debt they’re carrying far surpasses any kind of debt their parents or grandparents had at the same age.
But the good news, Millennials, is that you have flexibility and choices that previous generations never did. Even with burdensome debt, your financial opportunities and debt options are more varied than you may realize.
Check out our 4 pro-tips for getting your debt under control in 2019:
1. Relax and be smart
If you’re short on cash and dealing with numerous debt payments, you may feel a sense of urgency or panic. But resist the urge: you have options. Take the time to compare the top personal loan providers around—you don’t need to sign with the first lender that approves you, even if you have a low credit score. There are a wealth of personal loan and debt consolidation options out there with different terms and rates. Act from a place of power, not panic. There are solid options, tailored specifically to your financial situation.
LendingTree was founded as an online marketplace exactly for this. By simplifying the loan research process, they give you the ability to compare offers from several reputable lenders simultaneously. Many of the lenders specifically work with people who have bad credit.
2. Work on your credit score
When it comes to personal loans, credit scores matter more than car loans or mortgages, because personal loans are unsecured and require no collateral. If you’re late on car or mortgage payments, the loan company can demand personal collateral, but with personal loans, lenders care more about the borrower’s credit scores.
Leading online lending marketplaces have options for people with all kinds of scores. While you should still attempt to raise your credit score by paying bills on time, if you need a personal loan, there are options available and taking one can give you a much-needed opportunity to improve your credit with timely payments. AmOne offers an excellent online application portal that partners you with lenders with the best rates that match your financial situation.
3. Consolidate debt and start saving
It’s easy to put off setting money aside. “I’ll wait till I’m making x amount,” or “I’ll wait till I finish paying off x,” are common excuses for not saving. But this is a rookie mistake and you deserve better. While it’s true you might be dealing with a lot of debt to pay off, setting aside money for savings is crucial for a healthy financial life - no matter how much debt you have.
Experts suggest the 50/30/20 rule, in which you use 50% of your income (after taxes) for necessities, 30% for non-necessities (traveling, eating out, etc.) and set aside 20% for savings.But this isn’t possible if you’re paying off multiple loans and credit cards at different interest rates. By consolidating your debts and making one payment with a consolidation program, with a lower interest rate than the rates you’re currently paying, you’ll enable yourself to save more.
This takes us back to your first tip: be smart. Don’t let's numerous creditors stop you from saving, know your consolidation options. Accredited is a leading hands-on debt consolidation option. Certified in 32 states, their debt consultants offer the most comprehensive debt consolidation and relief plans available.
4. Consult someone you can trust
Dealing with money is tricky, but there’s no reason for you to attempt taking out a personal loan or embarking on any financial venture without seeking the advice of industry leaders that you can actually trust. Remember, you’re not asking for handouts, just for information to help you make the best financial decisions.
To get the information you need and understand all of your loan options, we recommend LendingPoint. They offer flexible, short-term funding to borrowers with fair credit scores, aiming to give borrowers like you the opportunity to rewrite their credit history. LendingPoint’s multidimensional underwriting model enables it to evaluate risk fast so it can deliver loans quickly at the best possible rates.
Wrap-up: If you’re under 40, it’s hard to think about your retirement or all of the future situations in which you may need a large chunk of savings in order to get you out of a bind. However, these situations are much closer than you think, and it’s never too early to start planning ahead. The first step on your road to financial relief and success is getting your debt situation under control and understanding all of your options.