Your financial health is every bit as important as your physical health. Avoiding financial pain and suffering in the future comes down to simple steps. Regularly monitoring your financial situation will help make sure everything is running smoothly, this can be made easier with the help of reliable debt relief services.
By being proactive about evaluating your financial health, it’s much easier to identify and act on the changes necessary to improve it.
What are some of the ways you can evaluate your financial health? There are quite a few to choose from, so here are eight of our top picks to consider when you want debt relief sooner than later.
1. Track Your Income and Expenses
Creating a solid financial foundation starts with tracking your income and expenses. In the business world, this is measured as cash flow, and it’s vital to the financial health of corporations and individuals alike.
Ultimately, you always want your income to exceed your expenses. But sometimes that’s difficult, and you need to leverage credit to get by. The main thing to keep in mind is to always average less spending than what you have coming in.
2. There’s an App for That
The easiest way today to keep track of your cash flow is with one of the many financial apps out there. These apps can quickly link all of your credit cards, checking accounts, and savings accounts to give you an overall snapshot of your financial health.
No math is needed on your part, so you can focus solely on the next steps to take toward improving your finances.
3. Calculate Your Monthly Debt Payments
Along with cash flow, your total debt is another measurement of financial health to keep an eye on. It’s smart to regularly calculate your monthly payments for all your existing debts.
From private student loans to credit card debt to auto loans, your monthly payments should be well under 30% of your total income.
4. Not All Debt is Equal
Aside from ensuring your debt-to-income ratio isn’t over 30%, it’s good to deconstruct the composition of your debt. The best debt will make you money in some way, either through increased business income or as a long-term investment like a rental property.
The opposite is unsecured debt that’s used to make fleeting purchases that don’t last. Vacations, eating out, and having drinks with friends are all wonderful experiences, but not the most financially healthy choices for using unsecured debt.
5. Analyze Your Savings and Investments
If you’re focusing on becoming debt free, you should analyze your savings account and any investments you may have. Evaluating the percentage return on your money can reveal whether or not it’s better to use it to pay down high-interest debt instead.
6. Balance Interest Earned with Interest Paid
Holding thousands of dollars in low-yield savings accounts is financially healthy sometimes. However, not when you have a mountain of debt with high-interest rates that are adding hundreds of dollars each month onto your credit card bills.
7. Monitor Your Credit Score
Once you’ve taken stock of your financial health when it comes to income, expenses, debts, and investments, it’s time to work on your credit scores.
The kind of apps we mentioned earlier for tracking income and expenses also offer free monitoring of your credit scores. Some even provide instant alerts when there’s a change to your credit report or score.
8. Dispute Credit Report Errors
If you happen to find errors on your credit reports like collection accounts, medical debt, and late payments, it’s crucial to dispute them. The process of disputing accounts can take quite a lot of time, with 45 days being the time the credit bureaus have to investigate your claims. So the sooner you start, the better if you plan on applying for credit anytime soon.
Do You Need Debt Relief Options?
When you evaluate your financial health, you may realize you need debt relief. However, because of how unsecured debts are set up, it can make getting debt relief a tough challenge. Fortunately, there are plenty of options, from debt settlement companies to help from a credit counseling agency.
Let’s look at a few of the best debt relief programs to consider.
Debt Relief Services
Reaching out to a debt relief company is a solid strategy for debt management. Top debt relief companies have professional debt arbitrators who can help put an end to debt collection calls and harassment from credit card companies—along with establishing a debt relief program that saves you money each month.
Debt relief is a relatively broad term that can encompass everything from debt forgiveness to tax debt relief to a debt management plan. The best debt relief services will steer you toward the form of relief that’s best for your long-term financial health.
Debt Settlement Companies
When you’ve found yourself deep in credit card debt, a debt settlement company is a great alternative to bankruptcy. Top debt settlement companies have expert negotiators on staff that knows how to deal with credit card issuers to slash late fees and over-limit charges.
Be aware that debt settlement services can sometimes have tax consequences if a significant portion of your debts are settled. That’s because when you settle debts, the Internal Revenue Service (IRS) treats the savings as income.
Also, check if the debt settlement company you’re considering is listed with the Better Business Bureau (BBB). Reputable debt settlement companies will have plenty of positive feedback about their debt settlement process.
Avoid debt relief scams that ask for upfront fees and company claims of entirely erasing debt.
Debt Consolidation Loans
Debt consolidation loans are a milder form of debt relief than debt settlement programs. Basically, one loan pays off all of your other debts so you have a single monthly payment. This saves on interest charges and helps you escape debt faster.
The downside is that debt consolidation requires a good credit score usually. Of course, these debt relief services have less of an effect on your credit than a debt settlement program does.
If your debt management plans involve boosting your credit score, consolidation loans are best.
Need to Boost Your Financial Health? Contact Alleviate Financial Solutions!
The debt settlement experts at Alleviate Financial are here to help you improve your financial health. Whether you are looking for a debt consolidation loan, debt settlement, or debt management—our debt relief experts can walk you through the process of finally becoming debt-free.
For a free consultation and turn your financial health around for a brighter future, you may fill out our online form or contact us at 800-308-2935 at Alleviate Financial Solutions today!