The news website maintained by CNN.com offers headlines from around the world but it is also a resource for consumers who are struggling financially. People who have trouble paying their debts or truly realizing how much it is they owe out to creditors. With a full understand of one’s debt situation, there is little chance outstanding debt will be paid off or if it is, the time it takes will cost consumers a lot more than they imagined.
CNN’s website offers several money tools available at no cost to consumers who want to better manage their money. In particular, their Debt Planner tool offers the opportunity for consumers to calculate how much debt they owe and how long it will take to eliminate that debt. The tool makes it easy for consumers to figure out which payment options will eliminate debt in the fastest time period possible.
The Debt Planner tool is just one example of the kind of free information out there to support consumer goals of eliminating debt and managing money more efficiently. While some debt issues will necessitate third-party intervention (attorneys, debt assistance, debt counseling), the majority of consumers have the necessary tools at their disposal to repair past credit mistakes and work to eliminate the linger debts they have in their financial life. Using such tools as well as a budget not only helps consumers get their finances back on track, it helps them to keep their money matters moving forward positively.
Why Debt Elimination Timelines Matter
Consumers do not always understand the importance of pay debts off in the quickest manner. Many feel that as long as they are making payments, the debt will eventually come to an end satisfactorily. However, there is an urgency to eliminating debts as fast as you can because it will save you money.
Loans, credit cards, and other financial agreements involve interest rates. For each payment you make, only a portion of this money goes toward the principal of the amount you actually financed. The longer it takes you to pay off the balance of the loan or credit card, the more interest you accrue. Depending on the total of your balances due, you may end up spending thousands or more in finance charges. If you are able to orchestrate an early payoff, you’ll be able to save that money and put it somewhere useful like an interest-earning savings account.
Another benefit of early payoffs on debt is the affect it will have on your credit report. If you have struggled in the past making on-time payments towards your debts, your credit score likely experienced a drop. By paying off accounts and putting them back in good standing, your credit score and history will reflect a significant improvement with each debt you pay off in full.
Preparing for Payoff
Once you have utilized the Debt Planner tool, you need to sit down with your budget and see where you stand financially. It is highly recommended that you allocate as much cash as you can each month towards debt payoff. This may mean some sacrifices such as not eating out, reducing spending on clothing and things that are not included in the basic needs category, or even taking on a part time job to add supplemental income directly to your debt payoff planning.
As you free yourself from debt and repair your credit standing, the most important lesson to retain moving forward is to avoid debt in the future. Learn to balance your cash to prevent having to accrue debt. Implement a savings plan that will ensure your financial needs are covered and you will not have to end up facing debt issues you need to settle ever again.