Do you have a lot of debt? Whenever you're bombarded with too much debt, it may seem like you'll never reach your financial goals. You're probably getting harassed constantly by creditors who are trying to garnish your wages and levy your bank accounts in order to get their money. If you want to get these creditors off your back once and for all, then you need to use an IVA to consolidate your debts and pay them off immediately.
What does IVA stand for? IVA stands for "Individual Voluntary Arrangement." It is a special arrangement between you and an insolvency practitioner. The insolvency practitioner enables you to consolidate all your outstanding debts by paying off your creditors. In return, you must pay the insolvency practitioner a small premium each month until the total amount of the consolidated debt is paid. Interest is added onto the total as well.
With only one monthly payment to worry about, you can begin to rebuild your credit report. Not only that, but you won't be paying as much money in interest either. Then you'll have a better chance of reaching your financial goals because you're under less financial strain. Just don't take out any more credit cards or loans until you get your current debt situation resolved.
Reach Your Financial Goals in 5 Easy Steps
After you have consolidated your debt, the next step is to rebuild your financial status. Your credit report will take anywhere from 6 months to 2 years before it starts to reflect the positive changes you've made to your finances. In the meantime, you must continue to make smart decisions regarding your finances. That way, you won't end up in a bad financial situation ever again.
Below are 5 easy steps to make that happen.
1) Save Money
You must save money if you want to establish a suitable financial future for yourself. Saving money is the opposite of going into debt. As you continue to make your monthly payments on the consolidation loan, you should also be putting money aside in a high-interest savings account. This will be the start of rebuilding your finances with liquid cash assets at your disposal.
2) Create a Budget
Create a budget to avoid overspending. You must know how much everything costs before you go out and buy something. Make a list of the names and prices of all your expenses for the month. This budget will be something that you must live by wholeheartedly. Do not spend any more than what your budget allows you to spend. Avoid impulse purchases and stick to necessities only.
3) Set Financial Goals
What do you want the state of your finances to be 5 or 10 years from now? How much money do you want to have saved? Do you wish to purchase a car or house? You must determine your financial goals so that you can readjust your spending and save money accordingly. If you don't have any financial goals, then you will likely fail at saving money.
4) Earn More Income
This might be easier said than done, but you can make it happen. If you're not earning enough money at your current job, then think about a way to make additional money. This could mean getting a second job or starting your own online business where you make some extra side money. The more money you can generate and save, the better your financial future will look.
5) Keep Track of Your Credit Report
The status of your credit report is an important thing to do. As you continue to restore your credit rating, you need to stay informed of all the changes that will show up on it. You are entitled to one free credit report per year from each of the main credit bureaus.
There are free credit reporting websites on the internet, such as Credit Karma, that let you see updates to your credit report at any time. If you pay off your debts or have some judgement or negative mark filed against you, then it is important to know about it immediately. Then you can either verify the mark or file a request to have the mark removed if it is inaccurate.