Debt settlement, also known as debt negotiation, allows you to make one monthly payment, and to get out of debt much faster than by making the minimum monthly payments or by using debt consolidation. With a debt settlement program, negotiators communicate with creditor(s) on your behalf to settle your balances to reduced and "agreed-to" amounts.
Here is how it works: Your debt negotiation team opens a trust account for you. You must deposit a portion of your outstanding debt (usually 50%) into the account over a specified time period (generally 2 - 4 years). Once the required amount has been deposited, your debt negotiators communicate with your creditors to settle your balances to reduced and "agreed-to" amounts.
If your creditor(s) agree to the reduced amount, you must pay what you owe on the scheduled date. After the debt is paid, your creditors will update your account as "paid in full" or "paid as settled."
While credit card debt can be expensive and stressful, getting out of debt doesn't have to be. How would you like to save $100 for your next debt settlement payment? How about several hundred dollars or a few thousand dollars? This article lists 10 quick and easy ways to save money for your debt settlement program.
1. This money-saving tip has been suggested before: Get a cheaper cell phone plan, and use the money that you save toward your debt settlement program. You might even consider a prepaid cell phone. With prepaid cell phones, you only pay for the minutes that you need, as opposed to paying too much for services that you do not use.
2. Shop at grocery stores that offer gas points. Suppose that your supermarket's gas points program entitles you to save 10 cents on a gallon of gas for every $50 you spend. You spend an average of $500 a month and therefore save $1.00 off a gallon of gas. If you purchase 50 gallons of gas a month, you will save $50. That adds up to $600 in savings over the course of a year.
3. Change your eating habits. Eat more fresh fruits and vegetables and more "lean" protein products. You can get apples for as low as $1.00 a pound when they are in season. Compare that to $4.49 for a pound of 92% lean ground beef.
4. If you are receiving a tax refund, you have obviously paid too much during the year to the IRS. So, make it a priority to adjust your withholding tax with your employer.
5. Did you know that the average family of four spends over $700 a month on groceries? And this does not include eating out. So, if you're eating out more than twice a week, consider eating out less. Why not eat out every two weeks, or even once a month. You will appreciate eating out more, and you will also be surprised at how much money you save. Which is more important? Making that next debt settlement payment with ease, or spending $150 a week on take out pizza and chicken wings?
6. According to the U.S. Department of Energy, the average American family spends 6% - 12% of their net monthly income on utilities. To save money, do your laundry in cold water, and set your thermostat one or two degrees higher in the summer, and one or two degrees lower in the winter. Which do you want more? To become debt free, or to make the utility companies richer?
7. If you have a free checking account, make sure that your balance is never below $100. If you don't have overdraft protection, the charge for insufficient funds now averages $35 per transaction. And according to SmartMoney.com, "Some banks even charge a fee each day an account sits in arrears."
But that's not all. According to Forbes.com, "The CFPB [President Obama's Consumer Finance Protection Bureau] is concerned that overdraft practices employed by some financial institutions increase consumer costs. One such practice is commingling of all checks, bill payments, debit card transactions, and ATM withdrawals each day and processing the largest transactions first. This maximizes the number of transactions that will trigger an overdraft fee. The CFPB will examine how prevalent this practice is and how it impacts consumers.
Essentially the CFPB has a hunch that banks are manipulating the order of your daily transactions to maximize the chances you’ll be charged an overdraft fee. Here’s an example: Say you’re a student with $50 in your account. You make 3 consecutive purchases for $10 each. That leaves you with $20, but you still need to buy a $40 book for class that evening. You decide to swipe your debit card anyway under the assumption you’ll be charged a $35 overdraft fee just once."
With the average overdraft fee of $35, one overdraft fee every month adds up to $420 annually. Use the money more constructively, such as for your debt settlement program.
8. Use coupons as much as possible when you shop. If you haven't done so already, don't forget to add Coupons.com to your list of favorite web sites. Coupons.com is the leader in online printable coupons for the nation's top brands and retailers. According to Coupons.com, "For decades, the Sunday newspaper has been the dominant distribution method for coupons, but as the reach of the newspaper declines and a growing number of consumers are online, more and more consumers and brands alike are looking to digital."
9. Try to combine manufacturer's coupons with sales. Plus, if your supermarket doubles coupons up to 99˘, you will be amazed at how much you can save each week toward your debt settlement program.
10. Finally here is a money-saving tip that we just couldn't resist: "Want to double your money? Fold it in two and put it back in your wallet."
So there you have it, 10 quick and easy ways to save money for your debt settlement program. While credit card debt can be expensive and stressful, getting out of debt doesn't have to be. Make saving money a top priority, and you will attract more situations into your life to save even more.