Hello, I'm your host, Mr. Chuck, a retired accountant turn truck driver, I reduce my debt in a relatively short period of time, debt reduction, to achieve financial freedom takes commitment, confidence, determination, relief from credit card debt, companies that offer relief from credit card debt. If it sounds too good to be true, then beware what to know before doing anything, this is an important how to do it yourself to reduce the cost and time to get out of debt, do it yourself gonna cost less because you're not paying somebody and it's going to be faster. But before I get started, for those of you who have student loan debt, just a warning on January 31 2022, the COVID-19 relief is ending. So if you not men making your student loan payment, you're gonna have to start again after January 31 2022. So you might want to be aware. Also, some of the providers service providers that process your payments are changing, one is completely going away and is gonna affect eight and a half million student loans. So keep an eye out in your mail or your email to make sure your service provider has not changed for your student loans. And you might want to check with your current providers to see if it's gonna change in when, because if you make the payment to a wrong service provider, you could be considered late payment and non payment. So you must be aware of that. Now let's get back to credit card debt and how to get relief. One of the ways is using a debt settlement company. So if you're maxed out on your credit cards and are getting deeper into debt, chances, you're feeling overwhelmed. How are you going to pay down that debt? Now imagine hearing about a company that performs promises to reduce or even erase your debt for pennies on the dollar sound like the answer your to your problems right? But beware, debt settlement has risk. Although a debt settlement company may be able to settle one or more of your debts, consider the risks associated with the programs before you sign up. These programs often require you to deposit money in a special savings account for 36 months or more. Before all your debts will be settled. Many people have trouble making these payments long enough to get all or even some of their debt settled, they dropped our program as a result. Before you sign up for a debt settlement program. Review your budget carefully to make sure you're financially capable of setting aside the required monthly amounts for the full length of the program to your creditors have no obligation to agree to negotiate a settlement on the amount you owe. So there is a chance that your debt settlement company will not be able to settle some of your debts. Even if you set aside the monthly amounts the program requires that debt settlement companies often tried to negotiate smaller debts first, leaving interest and fees on large debt grow. That's not good. Three because that settlement programs often ask or encourage you to stop sending payments directly to your creditors. They may have a negative impact on your credit report and other consequences. For example, your debts may continue to accrue late fees and penalties. They can put you further in the hole. He also may get a call from your creditor or debt collectors. Requesting payment you could even be sued for repayment. In some instance when creditors win a lawsuit they have a right to garnish your wages or put a lien on your home. Beware of debt settlement scams. Avoid doing business with any company that promised to sell you a debt if the company charges any fee before it settles your debts touts a new government program to bail out personal credit card debt. There's no such thing. Guaranteed it makes your own unsecured debt go away. tells you to stop communicating with your creditors but doesn't explain the serious consequences tells you to stop all debt collection calls And lawsuits, guarantees that your unsecured debt can be paid off for pennies on the dollar. So if they're saying any of those things or all those things, beware, it could be a scam, do your homework and do research on the company you're on to be doing business with, make sure there are no better business bureau, no complaints, if there are complaints, what kind of complaints there are, how long ago how long they've been in business. And of course, once you get your debt settled, there may be a tax consequences. Because if you get rid of your debt gets relief relief, then that is income to you. And you'll get a 1099 indicating that and you have to report it on your tax return and that will increases your taxes. This is from my show notes on consumer.ftc.gov articles settling credit card debt. So that's an article and I have another article COVID-19 from Experian comm companies that are working with the COVID relief programs to help you in case you're affected by the COVID-19 and unable to work or not working because of COVID-19. Okay, well, that's quick and easy. How does that help you any debt settlement company that you're going to work with the things to note, you can still have to make a payment on a monthly basis to them or to some type of special savings account. And before they will settle your debt, they don't want you to continue making payments on your debt, that's a no, no, you've got to continue making payments, even if they tell you not to. Why, because one, your debts gonna continue to grow. If you don't make any payments, you're gonna get late fees, you're gonna get interest, and it's just gonna get bigger and bigger. And as the article set, when they go to negotiate, that the debt settlement company is going to charge you a percentage of what they get the debt relief from. So the more debt you have, the bigger payday they're gonna have. So it's in their best interest for you to continue accruing bigger and more and more debt. So they can settle it for pennies on the dollar. So they claim. So if you owe$10,000, and you end up paying 5000, they're gonna get their fees based on the 5000, you didn't have to pay. And if that$5,000 was late fees and interest, additional interest you had to pay, what were you you're saving any money, you're not, they're creating a bigger bill for you. So they can try to negotiate down, then what happens if they don't win, say the creditor decides Nope, we're not going to do a deal he owes they owe at all because the three years he hadn't made a payment we've been pursuing, they hadn't called her back. We have no communication with them, we don't even know where they live for sure. And now you want us to settle. No, we want all 100% of our money, we want all of our late fees, we want all of our interest. Yeah, that's always gonna be the case that could happen. And then you're in more safe after all that then before you got started. That's why I recommend doing it yourself. You got in debt by yourself, you can get out of debt by yourself. You had to credit rating to get approved for the credit. So you at least have a job, you have income. And you had a good credit rating. Maybe you overspent on a credit card, say trying to furnish your apartment or your home. Or maybe you spent too much money on fancy clothes that are gone out of style every six months. So you got to keep doing it over and over. Whatever the cause of you build up your credit card debt or any debt for that sake. You did it on your own, you can get out of debt on your own. And that's how I'm gonna help you. If you do it yourself, you control everything and you're not gonna have to pay anybody else. So step one is quit creating new debt. You got to quit using your credit cards. Step two, is make the minimum payment on all your debt, your credit card debt, your auto loans, your home loan, and you got to make those payments on a timely matter why so you don't get It, those fees and penalties and additional entry build up that you're going to have to try to pay. Now, if something happens, such as you're unemployed for a long period of time, or maybe you had a health issue, and you're not able to work, then you need to call your creditors, let them know what's going on in your life. Ask them what you can do, work out something with them, he can do that on your own with no help. It's just a few phone calls. And once you get one done, it's gonna get easier and easier, you'll know what to say who to talk to, and all the above. But you just need to let your creditors know why you're unable to make a payment, or why your payments are smaller than what they should be meant when I say smaller than what they should be less than the minimum payments, you must always try to make the minimum payment no matter what number for me see, quit creating new debt, make the minimum payments, call your creditors let them know why you're unable to make payments. If that's the case, set up an emergency fund emergency fund is nothing but a savings account. And your savings account you want to put in money. So something would happen. Instead of using a credit card to pay for whatever needs to be done. You have the cash had the money and the savings account to do it. So you want to start out by building up an emergency fund at least $500. Over time, you're gonna build that up to $1,000. So you can do it in $100 increments, you can do in $250, increments whatever is comfortable for you. Once you maintain that have that amount in there, you keep continuing making the minimum payments on all your debt, and you pay all your monthly bills on time, all your rent your utilities, your groceries, and you don't pay for it by using a credit card. You don't use that to pay for this stuff. If you don't have enough money to cover that, then you need to cut back someplace. So how do you know what and where that you need to have a budget. If you have a budget, you know what's coming in, and you know what's going out. If you identify all the payments that you're making on a monthly basis. And over a period of a couple months, you'll be able to identify everything that you've been paying. Now when hard times hit, maybe your income is down, maybe you're unable to work. Whatever the case, you know where your money needs to go, he can pride tore it up, prioritize it, he can make sure your rents timely pay, you can make your utilities always pay him make sure is always gasoline for your car, and lease make all the car payments. If you have one car payment make that if you have two car payments, make at least one of them. And then cut out anything that you one no longer are using. That you forgot that you pay. Maybe it's a once a year subscription that you pay. Maybe it's a quarterly item that you pay and forgotten about, maybe it's a gym membership, you no longer go to the gym, whatever it is, do away with it, cancel it. After you get all that done, then look for ways to save money. Call your service providers, which my second article in my show notes has a list of service providers that will work with you. Most everybody will they want their money and try to find a plan that suits you. That gives you everything that you need and looking for that but gives you a cheaper or lower price. Sometimes he does do that and you can get a better service for less money. Just because you're changing plans and you're in with the same provider. For cell phone service. I used to do that but every year and a half, two years. Same thing with streaming cable TV. You shouldn't even be paying for cable TV. If you have internet access service and you're paying for your internet service. You need to maximize that cost you need to use it as much as possible. And one way of doing it is by streaming your TV. Get a antenna for your TV is good. That'd be a digital antenna. And watch your local channels through the antenna, they come in great, and it won't cost you a penny, and then stream whatever it is, but watch out, only have two streaming services no more, or you'll get costly. And do away with 150 100 $150 cable TV bill that you've been paying for the last five years, maybe doing watch three quarters of what it's providing you. A lot of it is like commercial TV, it's I call it, they, they just are advertising stuff. And you don't ever watch it, why pay for it, he can do that. And once you got your budget under control, and you identify everything you need to pay, and you gotten rid of everything that you no longer use, you'll find out that you've freed up some money. And then if you still need additional money, then you might consider a second job, or a hobby, or sell some stuff that you have in your home to get some extra cash, do whatever you have to do to get the money to pay your bills. It's just a fact of life. And that's what he got to do. So by doing it yourself, you're not paying a debt settlement company to do it for you. You're not paying for a loan consolidation loan, in which service add into your debt. And it's gonna be slow to get started. But over time, it will gather speed. And as it goes will go faster and faster and faster, you get that first credit card paid off. And then the second one goes a little bit faster than a third one goalie and faster than when you get all your credit card debt paid off, maybe you can work doing your auto loan, then maybe your line of credit on your home, and then eventually your mortgage, your mortgage should be the lowest interest rate. If you have a mortgage rate interest rate greater than 5%, you need to refinance. If you have good enough credit to refinance, and you have enough income to qualify, I highly recommend your refinance, get 3% or less mortgage for 30 years, 15 years, whatever it is that you can afford. That's what you need to do. And get yourself out of debt. So why is paying down your debt, how's that increase your wealth, the name of this podcast is reduced that increase well, so how reducing your debt is going to increase your wealth. It's a math formula, it's assets, less liabilities equals net worth. Assets is everything your own. And it's the fair market value of everything you own, not what you paid for it. But what you could sell it for today. Generally speaking, a home will go up in value, and everything else is gonna go down in value. So your car's gonna be worth less than what you paid for your clothes and your furniture, probably gonna be worth less than what you paid for it unless you got some type of collectible. And that's even debatable, and collectibles, there's going to depend on the market and the economy of what's currently going on. So it may or may not be worth as much as you think. So then, once you got that number, you subtract all the debt you owe, including all your credit card debt, your student loan debt, and everything else. And then the net difference is your net worth. So if you just graduated from college, and you got a lot of student loan debt, and you don't have a lot of assets, your net worth definitely could be a negative number. Don't worry about it. Now, you just need to know what it is. So in the future, maybe a year from now, when you look at it, there'll be a smaller negative number, then fountain than now become a positive number over time and you buy a home and then your mortgage balance will keep going down as you make payments so will gradually grow and grow and grow. And that's why reducing your debt is gonna increase your net worth. Also, if you have a job and you're struggling to pay off your debt, do not quit putting money into your retirement account whatever retirement count you have, from your employer. Continue making contributions to Do it, do not stop. Because if you stop that 50 or $100 of pay that you quit putting in there is not going to do a whole lot for your debt. But if you leave it in there, and your employer is matching it, over 20 or 30 years, that could end up being 800,000. A million dollars. So that could be that much more money that you have. And you need as much money as possible when you retire because of inflation. Today, this year, we're in a high rate of inflation. It's you know, the government officials are saying there's no inflation, but then they just increase social security for the first time 5.9%. So we got an inflation at least 5.9%, or they wouldn't increase the amount they're paying out to Social Security benefits. And it's probably worse than that. That's all they're willing to admit to be back in one moment with my final thoughts. If you listen to this podcast, reduce that increase Well, on an Apple device, scroll through all the episodes towards the bottom, and you can select write a review, and leave your comments. And you can rate this podcast. I appreciate all feedback. And I thank you for your time and doing so. Why is relief from your credit card debt important? with rising inflation, the less debt you have to pay, the more money you're going to have available to pay for the necessities, such as groceries and gasoline for your car. It'll be easier for you to make your monthly payments on everything else. That's the most important thing. Getting your debt under control, and keep it in under control takes a commitment to become financially Strucker you need to have your debt under control, we need to have a budget, knowing the income coming in, and your expenses going out is important to build up your emergency fund. Remember the keys to reducing your credit card debt and all debt is one, quit creating new debt. Quit using those credit cards. Pay everything with cash to make the minimum payment on all your credit cards. Three, have a budget, knowing your ends and out of your budget is important. And doing away with things you no longer need or use will help free up cash to help you speed up your payment of your credit card debt. Getting it under control is up to you. You must be committed to do it. And you got to stay the course. If you stay the course over time, he will gain financial independence. And you will be much happier overall in your life. By doing so maybe you won't be able to get all your debt under control in the next 10 years. But if you can get those credit cards paid down to zero, and get out from under them sooner, the better two to three years, you'll be much farther ahead and better off than what you really think. Stay tuned. And if you're interested, and a spreadsheet to do your budget, I have one, reduce debt increase wealth.com on Facebook and send me Instant Messenger, giving me your email address and asking for the spreadsheet and I'll be more than happy to send it to you. So stay the course and you'll be glad you did.