Does frugal living go hand in hand with settling your credit card debt
Have you seen advertisements in televisions where the debt settlement companies claim to reduce your outstanding debt amount and make you pay pennies for dollars? Don't you sometimes feel that these promises are too good to be true? While it is possible to get help from the debt settlement companies and reduce your total balance, this will surely have serious upshots.
If you take the option of repaying your credit card debts through debt settlement, you have to maintain a frugal lifestyle as without this, it is clearly difficult to bounce back on the right track. Check out the frugal living tips on how do you get out of credit card debt while already opting for debt settlement.
Distinguish between your needs and wants: Firstly, you need to ensure that you know the distinct difference between your needs and wants. Needs are those that you can't do without and wants are all those things that you can do without and those which are luxuries. When you receive a paltry amount of money, from which you have to keep aside money for repaying your debts, you should only devote your dollars towards your necessities and defer spending on the luxuries. Every time you want to spend on the luxuries, remind yourself about the burden of debts that you have to repay.
Save a huge amount of money: Although debt settlement will help you reduce the total outstanding debt amount, you still have to repay the remaining amount either in a lump sum or through single, affordable monthly payments. Where will you make payments from when you don't have enough funds? Well, you can easily save a portion of your hard-earned income and drop it in your emergency fund to remain armed.
Remember the due dates of the settlement company: When you're working with a debt settlement company, the debt consultant will open a trust account where you have to drop the separate monthly payments. Both you and the consultant will have access to this amount, and you're even allowed to withdraw funds from this account. However, you need to remember the due date on which you're supposed to make payments to the creditors, so you build credit and don't hurt your credit score even more.
Stop using your credit cards for good: Since it is the credit card that has brought you into the mess, you should stop using them. Make sure you use cash instead of credit so that you don't incur additional debt that needs to be repaid with the interest rates.
Author: Andy Masaki