Attitude of debt reduction

My family has been working on resolving our debt for the past couple of years. I am really seeing than an attitude of debt reduction is making a huge difference. Digging out of our financial hole can stretch your emotional limits. To compensate for not spending, there are days when I want to fill my car with everything in the store. 

That was before we fully developed a debt reduction attitude. Temptation isn't as hard to fight now than it once was. We evaluate every purchase on a need versus want basis and keep our eyes on the end goal. Doing that has made me realize how much of our spending is on "wants" instead of "needs".  It's easier to walk away from "wants" when I evaluate. Notice that I said easier, not easy.

There is definitely an attitude that goes with debt reduction. In addition to evaluating our purchases we had to move from the "well maybe" mindset to a healthier "yes we can" attitude. This means cutting back, making extra money when we can and putting it directly on bills.

I'll be the first to say that paying bills first can be easier said than done. No matter what size payday you have there's a real temptation to spend, spend, spend. Advertising does its job by making me yearn to spend. It's hard not to buy an iPhone when all your friends have one. Yet, when I put that iPhone to the want versus need test it fails miserably. My dumb phone still works so why get rid of it?

That's where the attitude of debt reduction is carrying me through.  For most of my life I have believed that resolving our debt load would be impossible. Now, I an see how my attitude increases my family's ability to handle money more efficiently. Evaluating is still hard sometimes but it's working. That makes the struggle worth it.

Getting help with bills

People who are drowning in debt sometimes need help with bill. Utilities, rent and other major expenses come due whether you have a job or not. Being in a bad financial position can happen for lots of reasons. Every email I get confirms that bad debts can happen to good people. Illness, the economy, fire, natural disaster or an accident can each put a family in jeopardy.

When you are in a crisis, it can be tough to find help. Almost every community has places that can help with some bills. The key to getting the help is to know where to start looking.

I am writing this article from the perspective of a nonprofit director who has helped people who were in crisis. Every community has a slightly different system and every agency requires different qualifications. This article is a general starting point for people who need help with bills.

If you are looking for help with bills, there are a couple of things to know.

Forget about asking for help with credit card payments or other types of revolving credit. Organizations that offer bill assistance will only help with emergency funding for necessities as funds are available. That credit card bill may be high on your list but it won't make the cut for their list.

Workers usually want to help but funds may not be available.

You may need to have proof of income, rent receipts and identification for every person living in the household and identification for yourself. The paperwork varies so calling an agency ahead of time can save you time and frustration. 

Utility assistance
Call your utility company to see what they will do. They may have programs that can help with bills. If not, the workers can usually suggest places that are in your community where you can look.

United Way
This organization does not typically provide assistance. However; they can be a good referral source and can often direct you to the right agency.

Help agencies
General help agencies in your community may be able to help with bills. A pantry may be able to provide you with a box of food. Obviously, this won't directly help with rent or utilities. What a food box can do is free up funds that can be used in other areas.

Churches
If you go to church, then start there. Talk with your pastor about your situation and see if your church can help. At the very least, your pastor can support you through the process and may be able to make referrals or fax agencies that can help.

Toys
Getting help with the bills at Christmas can mean that you need toys. There are people who can help. Your child's guidance counselor, pastor, day care or agency may be able to get you on an Angel Tree list. Be reasonable with your expectations. Families who are adopted from these trees are typically adopted by a small group of people like you and me. Leave the iPads, iPods and Xbox off of your child's Christmas list.

Think outside the box
Agencies run out of money too. Don't wait until you are in crisis to start getting help with bills. Being proactive can help you make a few dollars here and there. Taking cookies to work and asking for donations, eBay, holding a yard sale, collecting aluminum cans, raking leaves or shoveling snow off of driveways can help. It may not solve all of your problems but it may help buy some time.

Modest Needs
This organization may be able to help with small grants. They are not an emergency funding source and they do ask for documentation. If you are getting help with bills from any source, you almost always have to provide information.

Declining a debt settlement offer

My husband and I were offered a debt settlement on one of our medical bills. We are making regular monthly payments so the offer came as a surprise. The bill will be paid in full in three more payments (two after this month.) The debt settlement offer was tempting but we decided to turn it down.

Piggy bank

We took two actions before making this decision.

The first thing that we did was check the bank account. My husband went back through the records to be sure that the payments had gone out as scheduled. Then, he double checked to be sure that the account number matched the one on our bill. Before calling about the debt settlement, we made sure that the checks were cashed by the right entity.

The medical bill information matched and everything looked good on our end. I decided to do some online research about debt settlement before calling the medical billing company. (By the way, credit card companies sometimes do this too.)

It turns out that accepting the offer can potentially hurt my credit rating. The news did not make me happy. I found out that the bill can be reported as a "charged-off, settled" or as "paid, settled". These words just do not carry the same weight as "Paid in full".

After looking over the debt settlement offer on our account and doing the research, it was time to call the medical billing company. According to the representative our account was in good standing. I was told that the offers go out automatically. She gave us the green light on continued monthly payments and said the bill would be listed as "paid in full". Ending the call was a relief.

No one knows what the future will hold. Declining the debt settlement offer seems like the right decision for us. Right now, that's good enough for me. Since the medical billing company is okay with it, then it must be the right decision for them too.

Another car repair threatens debt reduction plan

Another car repair has struck in a big way. I've noticed a noise and vibration coming from the front end of the car for a couple of weeks.The noise in the car didn't start out as much but worsened yesterday.  I'm learning that when you ignore things they don't go away. They get bigger.

My 2005 PT Cruiser

The team at Midas in Knoxville is why we've been able to put 240,000 miles on my PT Cruiser. They laughed when they saw the repeat offender in the parking lot. 

Automotive technicians don't come any better. The folks at this Midas do all of my repairs and preventative maintenance. My car would never have lasted this long without them. 

It didn't take them too long to put the car on the rack and deliver the very bad news. 

My beloved PT Cruiser needs a new rack and pinion, bearings, tires and an alignment. Ouch! 

These types of car repairs aren't cheap. Our estimate is a little over $1,500 and the worst part is that Midas says it really all needs to be done at the same time. Instead, to keep from going into debt we're going to try to take it in stages. My PT Cruiser will be parked a lot until the repairs are complete. I guess the bright side is that we'll save a few bucks on gas. 

Here are the estimates for the PT Cruiser and the repair schedule:

$720 Rack and pinion (Immediately - it's in the car hospital now.)

$190 Tires (Almost immediately)

$220 Bearings (Next payday)

$60 Alignment (End of the month)

We're going to put our Christmas stash toward the biggest repair. Gifts for the kids (college age) are already purchased and I have a small gift for hubby so that helps. The turkey and veggies for Christmas dinner are in the freezer.

Our plans were to start putting some money into the car next month. Its frustrating to have this car repair right now but it isn't insurmountable. If we didn't have the stash and gifts purchased I would be freaking out (and going into debt). Instead of going into red level panic mode I'm at the orange level. It's a definite improvement.

One thing that getting out of debt is teaching me is the ability to better handle a financial crisis. The car repair is scary and frustrating. But, we only have $200 left to pay on it. I figure we can put in a few repairs for less than the $4,200 that we've paying every year in payments.

I enjoy my PT Cruiser. Despite the car repair I look forward to driving it for years to come.

My student loan debt consolidation

My student loan debt consolidation paperwork went through. I thought this was done a few years ago when I applied for a lower interest rate on the student loan. Somehow one of my loans fell through the cracks. By the time this was I was in default. 

My options were to either come up with all of the money to pay off the second loan now (fat chance) or go through with a student loan debt consolidation. There really wasn't much choice but to fill out the paperwork. 

Notice arrived yesterday saying that the student loan consolidation is approved. If what I was told is correct then my monthly payment will remain about the same. That's the good news. However, there was some bad news that they did not tell me. The default and consolidation has been reported to my credit agencies where it will appear for the next seven years.

It was not a good moment when I opened the mail last night. It's funny the things that are never mentioned when you are working on a student loan debt consolidation. I also don't know what the final total is going to be yet. 

This is frustrating. We've been working hard to get things turned around. The best that I can find out is that the mark isn't good but the impact the consolidation will have is uncertain. Hopefully, getting out of all other debt and then knocking this out will help.  

We've been tightening our belt and working hard. My monthly balance doesn't look like it will be effected. More good news is that my other monthly bills are decreasing. The difference is in the length of the new student loan debt consolidation.  

Paying our other bills off will mean being able to eventually pay more on the student loans until they are gone. At this point my best option seems to be to stay the course. It's slow but it seems to be working.

Online writing sites where my work appears

This blog is about how I'm using online writing income to reduce debt. So naturally, my friends are asking how I monetize my blog and what online writing sites have my work. Here's a little bit more about that.

Back in 2008, I started writing for a site called Associated Content. It was a fabulous place to learn and grow. Plus, I can write articles about anything I want and submit each for an up-front payment. The pay per article isn't much but it earns monthly residual income that helps with debt reduction.

I didn't think that an online writing site could get better but it did. Some changes were made when the company became the Yahoo! Contributor Network. Now, it's better than ever and continues to be my favorite online writing site.

A friend suggested that I write on Examiner through her referral link. It sounded so interesting that I decided to give it a whirl. Using her referral link gave her a $50 bonus that she needed. Publishing online articles there gives me a few more dollars to go toward debt reduction. The articles don't pay a huge amount but they do earn residual income. There is a minimum threshold of $25 before payment is issued.

The other online writing site that I use is Factoidz. It's a British site where my online  articles earn residual monthly income. My earnings can run anywhere from $3- $18 per month. Upfront payments are not available. However, special assignments may run up to $20 or more. Factoidz also has a backlinking program that can pay up to $20. Payment is monthly.

Payments from online writing sites are not huge but they help with our debt reduction.  The down side is that if you don't feel well or can't write you don't earn. There are a couple of other ways that I monetize to reduce my debt and will cover those in another article.

Other sites where my work appears are my other blogs. Check out Youve Been Reviewed and Gayle Crabtree.com. 

Organizing your bills will help reduce debt

We're finding that it's almost impossible to reduce debt if we can't see what we're working on. It helps us to keep a list. New bills are added as they come in. This helps us keep everything neat and orderly. We add the information for each but still keep the paper copies. That way, if we need to refer to something on the full bill we're able to do so.

My husband likes to use an Excel spreadsheet. I'm more of a visual person that sometimes finds Excel hard to work with. A plain old paper and pencil works fine for me. We review everything periodically together. This gives me a better feel for where we are. Seeing the totals come down also gives me the reassurance to believe that we can reduce our debt. That's always a good feeling.

Keeping the bills organized provides a road map for us to follow. It helps us see where we are going and makes it easier to plot how to get there. Who knew that something so small could make such a huge difference?

How do you celebrate debt reduction good news?

Don't you just love getting good news? I do. That's why I was so tickled to get the mail today. Inside was a receipt from where we paid off a bill earlier in the month. It's very validating to know that (so far) our plan to reduce our debt is working.

Staying motivated can be really tough. We sometimes feel so overwhelmed when the bills roll in that we don't celebrate the joys of getting anything paid. It's as is we approach it with the attitude of 'one down, tons more to go'.

I'm not sure that's productive. To change things up we're posting the paid bills on our refrigerator. Our very first one is the bill from this doctor. Sure, some people may feel like $158 isn't much. To us, it is a reason to be happy.

So, up on the fridge it goes. I can't wait to add more to it. How do you track your achievements? Let me know by posting a comment.

Happy bill paying!

Two more bills down and paid off

We have two more bills down and paid off. Getting control of our finances it pretty darned hard. I think it will be worth it though. The breathing space is a relief.

If this is your first visiting this blog let me explain what we're doing. My family and I are average. There's nothing special about us. Like most families we struggle to make ends meet.

It became apparent a few months ago that extra income was going to be needed to help pay off our bills. The challenge was to find something to work around our often chaotic schedules.

Then I found an online website to write for. Recently, it became the Yahoo Contributor Network. The extra money has been a huge help in paying of credit card bills and other debt. In searching for other companies I found Examiner and Factoidz.

The amount of money that I make from writing online isn't huge but it's helped me pay off $200 worth of bills this month and a couple of months ago it helped me buy a new netbook.

The hard part has been rolling the former payments onto other bills to pay them off more quickly. Look for another blog post about that in the future.

Why poor people can't stop the debt cycle

I've read a lot of articles about being poor and experienced it myself. Nothing says it better than 5 Things Nobody Tells You About Being Poor. It outlines the cycle very well.

A few experts say that making more money won't solve financial problems because you will blow it the extra income. I've been told that the key is to manage what you have. I've also been told to use financial windfalls to pay off past due bills.

I'm sure that works fine for some people. If it works for you, good. Part of the problem for my family is that there isn't enough income to cover everything. After all, that's why I'm writing.

Let me put it in concrete terms. A young couple starting out doesn't have a washing machine. They go to the laundromat and pay, pay, pay. Pretty soon they could have bought a washer. The way to stop using the laundromat is to buy a washing machine.

But, money they could use for a washer is being spent at the laundromat. If the new couple could have afforded a washer they would have gotten one. So, the cycle continues. The pattern is broken when someone either steps in to buy them one or they get a windfall and buy it.

General finances seem to be that way too.  At least mine are. That's why I'm using the money earned by writing to pay off bills. Give me a week or two to get over a health issue and I'll post new totals.

Granted, the writing money isn't a huge amount. It's literally $5 - $10 here and $3 there or maybe a few pennies from ad clicks on the site. But, that $5 is a little over a gallon of gas. Toss in those pennies and at the end of the month and it's 2 gallons of gas.

Thank you for reading my Getting Out of Debt Journey.  If you are on this journey with me please stay encouraged. Every little bit adds up and every 'add-up' pays down a bill. I think that we can do this.

Let's cheer each other on in the comments section shall we?

Helpful debt reduction blogs and websites

I'm reading everything that I can get my hands on about managing my debt. A few of you have emailed me to ask about blogs that have been helpful to me. There are several debt reduction websites that have been helpful. This article lists several of my favorites.

Although, please keep in mind that I'm always adding to my arsenal of information. Feel free to share your favorites. Just add the urls and titles to the comments section below.

In the meantime, here are some debt reduction blogs that have helped me. Maybe they'll be of use to you as well.

Living on a Dime

Living frugally helps stretch my budget and enables me to pay off bills a little quicker. This blog offers ideas that you can use to live frugally. There are links to freebies, decorating ideas and general ideas. It even offers suggestions on what to do with old clothes that you don't need.

Frugal Dad

I enjoy this blog for solid advice and optimistic attitude. It's the story of one dad and his pursuit to be debt free. There are a lot of commercial blogs to help you get out of debt. It's nice to read a debt reduction blog that was written by a real person.

The Motley Fool

This blog on finances is chock full of hints that can help reduce debt. Then, it goes a step farther but offering other financial advice. I've found it to be helpful in many ways.

Duggar Family

This may not be your traditional debt reduction blog or website but it is inspirational. I figure that if a family with 19 kids can be debt free there is hope for me too.

Dave Ramsey Newsletters

This guy is probably one of the most recognized financial gurus that there is. His program has helped many families reduce their debt load. I've recently obtained his book and am finding it to be helpful. His newsletters on his debt reduction website have given me practical tips that I can use. It's plain language that anyone (including me) can understand.

These are my five favorite debt reduction blogs and sites. What are yours?

What I liked about Managing Debt for Dummies

Reading as many helpful books as possible is part of my getting out of debt plan. Obviously, I know nothing about dealing with or handling money. If I did, my family possibly wouldn't be in this mess.

Past experience with the"...for Dummies" series has always been pretty good. So, I decided to check there to see what is available. Once again, this series did not let me down.

I've found Managing Debt For Dummies to be a pretty helpful guide. The book cost me $11.55 on Amazon. Used bookstores may have a copy for less.

The chapters are well laid out and written in a light conversational tone. The author manages to help you believe that it's possible to get a handle on your debt situation.

Granted, the information in the book isn't always pleasant. No one likes 'Facing Financial Facts' as outlined in chapter 2.


The chapter in Managing Debt For Dummies that spoke to me the most is the Chapter 3. Adopting an Attitude for Success is something that I'm struggling with. This part of the book has helped me keep a positive focus, motivate my family to help and its helped me deal with the setbacks in a more positive way.

One of the things that is mentioned is to not beat yourself if up you feel like you are responsible for you family's financial woes (paraphrased). Managing Debt For Dummies is helping me see that if I am responsible for it then I can improve it.

Even better than seeing that is believing it to be true. The book is reinforcing my belief that things can get better and its helping give me tools to do just that.

There website www.dummies.com also has some helpful tools. Check under Personal Finance to learn about having fun for free, creating a budget, dealing with financial shortfalls and more.

I'll be posting about other tools as I find them. If you know of any please give a shout out in the comments section. I'm happy for all the information that I can get! :-)