Today''s featured article discusses how to escape the debt trap... mainly by avoiding credit cards, high interest loans, etc. One aspect of debt evasion the article fails to mention is Pawn Shops. A quick and easy way you can avoid debt is by selling gold jewelry and old watches to your local pawn shops. Have you ever used a pawn shop before? If so what was your experience? We would love to hear about it (good... bad... or in between). Tweet about it @pawng or @youpawn. If you haven''t already be sure to check out YouPawn.com a new era of pawning. Read the article below:
Escape the Debt Trap this Year
It may seem like you’ll never escape the debt trap. Whether you have managed to get through the recession with steady employment or not, most people’s debts are simply spiraling out of control.
More than ever, young people ranging in ages from 25 to 34 are turning to debt counseling services in an attempt to get their financial woes under control. Unhealthy spending habits are hard to break, but this doesn’t mean that you’re beyond help.
Be Forthcoming About Your Situation
Contact creditors as soon as you know you’ll have a problem paying your bills. Ignoring them will only mount up debts with added late fees. Being open with creditors also gives you the chance to work on negotiating a repayment plan that suits your current situation, which will help you get out of debt faster.
Consolidating debt is a popular way to cut monthly payments and save on interest and most creditors provide some sort of consolidation option if you qualify. Instead of juggling several credit card or loan payments at once, consolidate them so you can focus on making one payment each month.
In some instances, consolidation may not be an option. Perhaps your credit score doesn’t allow you to qualify or you simply can’t get a good deal on consolidation. This is when you need to form a plan. Determine which of your debts carries the lowest balance and focus on paying that one off first.
Continue to make minimum monthly payments on other credit cards and loans, but double up or even triple the monthly payment on the smallest debt.
This allows you to get free from one debt quickly, which can help keep you motivated when it comes to tackling the next highest balance.
Before focusing on this type of debt management plan, try to accumulate a decent amount of money for an emergency savings fund. $1,000 is a good amount to shoot for. This ensures that you can make those double payments while still having something to fall back on in case the car breaks down or there’s an unexpected health concern.
Turn to counseling if all else fails. Many charities provide free or low-cost debt relief advice to people in their communities, so take advantage of these services.