Practical Credit Management Tips - Riding Out The Recession

While our country is in the midst of a serious recession, families also face their personal financial crisis every day. Big business and banks are being rescued through government bailouts, but where does the mainstreet consumer find his personal bailout?nnThis is not the time wait and see what the government can do for you. Quite frankly, we have to bail ourselves out. Some of the options may not be pleasant. Many choices are uncomfortable. But remember, expecting 'the comforts' before we could pay for them is what has got us into our financial crisis.nnnAssess Your Current Situation. nnEach month many consumers lose track of their expenditures and spend more than they earn, leaving them in debt and with no savings.n nPutting together a realistic budget actually takes very little time. Budgets might sound complicated or confusing for some, but they are quite simply your income and expenses, put down in writing for review. nnIf after writing out your budget, you discover your are running a deficit (more expenses than income), you have two choices: Either you make more money or you spend less.nnWhether or not you have a way of increasing your income, if you have a deficit, how has that debt been created? Credit card debt is probably the biggest villain, for some people equal to or greater than their housing costs.nnnCutting Back On ExpensesnnWhat are some of the easier things you can cut back on in your daily spending? nnFor families, the grocery bill is probably the biggest monthly expense and can be reduced significantly with some very minor changes. nnEliminating non-essential items such as alcohol and cigarettes can save you much more than just your health. nnBrown bagging it to work or school is also fast becoming the cool way to go, rather than spending for take-out lunches.nnCar related expenses can be another significant money guzzler. Consider car pooling, public transit or walking. With a little planning in advance, you could also reduce car costs by consolidating errands with other short trip responsibilities to keep car use to a minimum.nnnMerging Your DebtnnUsing multiple credit or retail cards and carrying a balance on them, month over month, is a recipe for disaster. Compounding credit card interest can bleed your bank account dry every month. With credit card interest charges averaging 18.9%, just paying the minimum payment each month (usually about 3% of the principal balance) can keep you in debt for nearly 20 years. nnThere are several ways to merge or consolidate your credit card debt into one debt, with one payment and lower interest.nnSpeak to your credit card issuers and request a reduction in the interest rate they charge. If you have an offer for a low interest card from another card issuer, yourncredit card provider will likely match that offer to keep your business. nn A line of credit from your bank, with a fixed term and low interest rate is one option. It is vital that you cut up your cards and stop creating more debt while you endeavor to pay off the line of credit. nnRefinancing the mortgage on your home is another possible option. If you have equity in your home, you may be able to refinance for a larger mortgage in order to pay off your debts. Keep in mind, you would be spending the equity in your home.nnThere are a number of other options available to assist in resolving some of the many financial dilemmas that consumers may be facing. Debt settlement, loan modification or even bankruptcy, can also be possible resolutions for your financial crisis.nnBefore making any formal decisions, review the many options available and evaluate which would fit your circumstance. Being informed and with a concrete plan of action in place, riding out this recession could be less painful than you previously thought.