Who is the best most efficient Debt Reduction Service or Debt Counselor? Are they really helpful or hurtful ?

You don’t want to go this route. The counselors won’t do anything you can’t do yourself. They also charge a high fee so say you had debt that would take you 3 years to pay off it would probably take 4 1/2 with a debt counselor. Remember they are in business to make money too. Also, it effects your credit as it won’t show that you paid the full amount, it will say debt reduced and paid I beleive, which overall will hurt you. Heres what you need to do to get back on track.

Start carrying a list with you and writing down everytime you purchase something. Even if it’s a .50 or $ 1 item write it down. Do this for a few weeks.

Now sit down with your paycheck, bills and that list. Do a budget paying the minium on all your bills and see how much extra you have left. Just remember to include everything from rent, food, electric, gas, smokes, insurance etc.. Just don’t cheat. Next, figure out what your highest accuring debt is. Pay any extra you have to it and keep paying the minium on everything else. Once that highest debt it paid take that amount of money and add it to your next highest accuring debt and keep doing that using the snowball effect.

Ok, lets take a look and see what you can downsize on or cut out of your budget completly. Things like home phone, cell phone, internet, cable etc.. you need to get rid of these things instead of having a home phone and cell just have one, get rid of the cable and use a antenna($ 10 bucks at radioshack) and internet get rid of it and use it at the library for free. If you have a car payment sale it and get something for cash. If you have a spare room rent it out you can find people looking for a place to stay at craiglist or roommate dot com. You should also look into a second job. Look at that paper and you will see you probably are wasting money on things you could get for less or don’t need at all. Examples are taking a lunch to work, taking drinks to work, make your morning coffee, don’t buy those $ 1-$ 2 items everytime you go in the gas station, cut back on smoking, eat alot of soups, pastas and vegatables etc.. You see there are all kinds of ways to cut down your expenses.

You should have a 3-6month emergancy fund. You can do this two ways either save 10% of your take home pay or instead of paying the extra to your highest accuring debt pay the minium and save that money. This is for car repair or lose of job not to go shopping or out to eat with.

Learn to live frugally and watch every dollar you spend. They all add up and if you want to get out of debt it will take alot of work and focus. You can do it just remember what your goals and dreams are and that will help you along the way. Best of luck and happy holidays.