Debt Consolidation Credit Counseling In Phoenix

You have reached the point in your life that you realize that you need to make some drastic changes in how you manage your spending and credit before you reach the point of no return. You do not want to rush into "debt consolidation" or use a home equity loan. You need to have a plan that is worked out very carefully.

You will start by collecting all your credit reports, bill payment statements, and credit card statements, mortgage and insurance records. Locate debt worksheets on the internet to help you work. All of these steps will be taking place at the same time.

Be meticulous about ensuring that your credit reports (there are 3 major credit reporting agencies) are accurate and truly reflect your credit status. To complete this project may take some written communications with one or all of the credit reporting agencies. Stay with the process.

Put in writing all of your financial obligations. You will be particularly concerned with credit cards and perhaps small loans. List the cards with highest to lowest interest rates in order, and the minimum payment for each card.

Figure out your disposable income. This is the amount of your salary that goes for necessities such as mortgage, car loans, credit card payments, utilities, other loan payments. When you subtract this amount from your salary, you will have your discretionary income. This is the income you can devote to reducing debt.

Next, decide which loans and credit cards you can pay down in the order you can do so. When tackling the first pay as much as you can, and pay minimum on the others. When number one is finished, apply that amount to the next and so on. This is "tough love" money management style and will be needed for quite awhile.

Commitment is definitely needed when you take on this major project. You will have to change your lifestyle. You have to stop living above your means. There will be no more unnecessary spending. Buy only essentials, eat at home, find alternatives to travel. The BIG MUST IS STOP CHARGING.

This situation didn't happen overnight and it won't improve overnight. Is it worth it? This is your financial life. You are the one who has to save it.