This may be the most under-used tip of all that can literally save you thousands of dollars if you apply it. It is easy, fast and works about 60% of the time. Ready? Since this is step 5 in a 5-step process, let’s go back and take a quick glance at each of the steps. In order, they are:
- Cut Expenses
- Maximize Income
- Get Current on Everything
- Use the Dave Ramsey Debt Snowball to Arrange Your Debts
- Make a Call Every Time You’re Ready to Pay Something Off
Congratulations if you’ve made it to step 5! That means you’ve started living on a budget and setting your mind to beating your debt. In other words, it means you’ve committed to becoming FREE! So let’s look at the last step in this whole process. As you start to pay down your debts, there will come a glorious day with each of them when you realize you have enough cash to pay one off. Here’s where this step comes into play. When you see you’re ready/able to pay off a debt, pull out the bill, find the contact number for the company and call them. Ask if they’ll waive a month or two worth of interest charges or (if you’ve been past due) some late fees. If you’ve got a $1,500 balance on your credit card at a 29% interest rate, having them waive even one month of interest can amount to a $37 savings. This may not sound significant, but if I paid you $37 for every 15-minute phone call you could make in a regular workday, how long would you take for lunch?
- We’re not asking for a settlement (in most cases) – a settlement is when you’re asking for some of the debt to be written off rather than just having fees waived and this can have several negative consequences. For example, with many debts you might have to pay the taxes on the debt forgiven. We won’t get into that for now…just keep in mind that settlements may have negative consequences.
- Make this call only when you’re ready to pay the debt off completely. If you have a $400 balance and $300 in hand, call and ask if they’ll waive $100 worth of interest/fees if you pay it in full. The worst they’ll say is no. If they say yes, be sure to ask for confirmation of that waived amount either via email or letter. Don’t give them your payment information by phone because that can cause all kinds of problems. But do ask – I’ve seen people save hundreds of dollars by simply asking for a discount.
So that’s it! Five steps to getting out of debt. Keep it simple, build momentum, be realistic in setting your expectations and KILL YOUR DEBT! If I can be of help, be sure to contact me.