In today's uncertain economic climate, having a robust emergency fund is more crucial now than ever.

Even the most prepared and financially savvy individuals can get caught off guard and find themselves facing unexpected financial challenges. Life happens and it can happen quickly. So, when your emergency fund starts dwindling you need to react quickly. To best prepare, it's essential you adopt strategies that effectively manage your finances and focus on problems you can fix, not the ones you can’t. Here are the steps you can take to best do so:

The first step you should take is to perform a budget analysis, thoroughly evaluating your current financial situation. Not sure how to create a budget? We got your back, check out our 

 and debt to income ratio tool to calculate how much money your left over with at the end of each month. Once you’ve calculated and better understand your income and expenses and monthly debt obligations, you can take a more methodical approach setting yourself up for future financial success. Although budgeting might not be the most “fun” thing in the world, it will help you identify areas where you can cut costs and prioritize your spending. And that type of knowledge could help transform your life for the better.

Reviewing Your Budget and Cutting Expenses

Focus on necessities like housing, utilities, and food. "Needs" will always come before "Wants". We need to drink water and eat food, we need a roof over our heads (although not everyone around the world is afforded this luxury). We don’t need to have 7 different streaming services on demand at our fingertips, we don’t need to have 11 different pairs of sneakers, etc. Once you’ve differentiated between needs and wants, it’s best to help put those into categorize so that you can see which expenses can be cut out altogether.

 Reach out to your utility companies, insurance providers, and other service providers to discuss potential discounts or ways you can reduce your monthly bills. IT doesn’t hurt to mention how long you’ve been a loyal customer. However, sometimes the most effective strategy is some simple honesty. Let them know you're undergoing financial hardship and have fallen on hard times. Not every company will genuinely care about you as a person but it can’t really hurt to ask. Maybe they have some discounts or hardship programs you’re unaware of or maybe you speak with an employee that’s in a mood to sincerely help a random customer.

 After you have a proper budget in place and have your expenses listed, you need to prioritize them by opportunity cost. Prioritizing your monthly expenditures using an opportunity cost mindset will help you 

. In the long term, it’s a skill that will help you make better decisions all around, not just financial ones. Temporarily cut back on discretionary expenses like dining out, entertainment, and subscriptions. Anywhere you can reduce expenses will be a plus further down the line!

 Consider part-time work or freelancing to supplement your income. The economy is shifting more and more towards a flexible freelance economy. In the United States, over 6 million Americans over the age of 55 currently have supplemental income via a gig job. Any additional income will greatly help you make up the windfall of not having a financial cushion and hopefully allow you to get back that previous position. This is why many Americans have picked up extra part time work.

 Reach out to credit card companies, loan providers, and mortgage lenders to discuss hardship programs, deferments, or forbearances. It's possible some might lower your interest rates or have some other ways to help. You don’t know what you don’t know. Never be afraid to ask for help, even from unlikely sources.

 Focus on paying off unsecured debts first, since they likely have the highest interest rates. You always want to tackle non-collateralized debt and unsecured loans to reduce the highest interest rate debt. This type of debt is considered bad debt, so it is also has the a detrimental impact to your 

. However, if you are struggling financially and have to pick and choose what bills you can pay and can’t pay, always keep current on secured debts. You should always to start picking and choosing what you can and can't pay, always handle secured and collateralized assets first! The reason being is if you become late on these bills you will likely lose your property.

 Always try to explore options that lower interest rates on credit card debt or personal loans. You should always try to call your creditors and explain your situation. You have nothing to lose by calling your creditors and speaking to them candidly and plainly. You can ask them to lower your interest rates and see what hardship options they have available, if any. Getting results out of this process is not guaranteed, but it doesn’t hurt to ask!

 Unless absolutely necessary, explore withdrawing funds from retirement accounts like 401(k)s or IRAs. You should always be aware of the potential tax implications and penalties for doing so and leave this option as one of your last resorts. Getting taxed and penalized at the same time isn’t ideal, but if you a resorting to this, your current situation isn’t ideal either.

 If you have equitable cash in your life insurance policy, consider withdrawing a portion of that cash against the policy. Again, these types of options are usually a last resort attempt to keep your financial situation afloat. Withdrawing from a life insurance policy isn’t something people typically want to do, it’s something they have to do.

 If you have a significant amount of equity in your home, you can explore a home equity loan of credit. Ideally, you don’t want to turn unsecured debt into secured debt because if your situation worsens it will make your financial situation worse in the long term. However, this is a risk that many people take and an option that requires a good credit score. It's not at all ideal and I would not recommend using this option unless you really feel you have no other option and are dire financial straits.

 A good way to declutter your home and make some quick money is by selling any unused valuable you no longer need. Sometimes, it’s easy to get emotionally attached to items if we no longer use them or need them but if we can let it go it can help us financially and also help live a more organized lifestyle! This could be a fantastic way to raise some cash in the short term and keep your finances afloat.

 Another great way to manage your finances is by creating a meal plan so you can strategically shop for groceries to save money on food related expenses. The biggest and easiest opportunity here will be cutting down on eating out/ordering in. However, you can definitely look to spend less at grocery stores as well and do some coupon clipping. This will also help you cut costs.

 There are so many hidden free and low-cost resources available to the public, we usually know nothing about. Knowledge is power with many of these resources; you just need to be in the know! So, always try to explore community resources, libraries, and online platforms for free or affordable options for entertainment, education, and support. Sometimes the best things in life really are free!

 Reach out to friends, family, or professional networks for potential job opportunities, financial advice, or assistance. It can be really tough to ask favors from others, especially in times of financial hardship but you don’t have to ask others for a handout. Sometimes simple words of advice or a different job opportunity can be the slingshot that sets you on a completely different trajectory. So always try to reach out to your network and see how "you can best help yourself" via your network of family and friends.

Financial hardship can be an overwhelming thing to handle. However, with careful planning and proactive measures, you can navigate these challenges and regain financial stability in the long term. By more completely understanding your financial situation, implementing cost-cutting strategies, and seeking appropriate assistance, you can emerge from this difficult period stronger and more resilient than ever.

Life happens quickly. To prepare for the unexpected, you need to effectively manage your finances and focus on problems you can fix, not the ones you can’t.

Surviving Financial Hardship: Tips for When Your Emergency Fund Runs Dry

Adem Selita

What is Emotional Spending and How the Heck Can You Curb it?

The term emotional spending can be difficult to define, as it can have a different meaning for everyone.

Some think of it as spending when you are stressed out, unhappy, or even bored. But that's not necessarily the case.


Grocery shopping on an empty stomach can be a form of emotional spending. That emotion would be hunger.

Sure, "your eyes might be bigger than your belly", but your emotional state was the main motivating factor behind your grocery shopping spree.

Some people also spend based on fear. That toilet paper craze we had back in 2020 during the coronavirus pandemic, that was a very prolific case of widespread emotional spending.


Especially since, most people don't technically need toilet paper to survive. Although, some might say that's debatable...

Some also spend emotionally based on discounts and bargains. While others simply enjoy the "high" of buying stuff they don't actually need.

Ultimately, it is defined as spending that is based on your "emotions".

Meaning, you make purchases based on your current emotional state. It's a really impulsive habit — like anything else in life.

Emotional spending has become much more pronounced during the pandemic and has led many into debt in years after. So much so, that it's actually begun to wreak havoc on the finances of many Americans and motivated them to get 

How Can You Tell if You Have an Emotional Spending Problem?

Well, the best indicator is if, after you've actually made a purchase, you try to use logic to justify your purchase afterwards.

While these justifications can make it seem like the purchase wasn't a big deal, one thing is for sure, when you are spending based on emotions, you are often buying things you simply do not need.


This can be most apparent if someone asks "why did you buy this?". You might feel a little defensive afterwards but if you get asked that a lot, it's probably not without good reason.


 If someone says you buy a lot of "knickknacks", "doodads", "tchotchkes", "trinkets", or "whatnots".


I'll be honest. I don't actually know what all these terms mean, but I do know they are most synonymous with the term "junk".

A lot of times, our family and friends are the best gauge here. If you hear comments from your family members, without having to ask... You may have an emotional spending problem.


And sure, that family member or friend asking you might be a little annoying and nosey but their heart is in the right place.

Since emotional spending varies, so do triggers. Some experience regular triggers that result in people needing to “fight” impulses to spend, and others deal with more periodic triggers that come and go.


Ultimately, these triggers come down to the emotional state a particular individual is in. If you had a really good day, you might reward yourself with a nice meal or new outfit. If you had a bad day, you might do the same to cheer yourself up. The same goes for bigger purchases.

It is common to want to splurge a little when celebrating a special occasion, or if you feel like you had a bad day or a bad week. Most people can think of a time where they spent a little over their budget on a nice date out or when they purchased a new outfit they didn’t really need, but they did it because it made them look and feel great. 

The problem that comes from emotional spending is that it can cause you to lose track of your budget and financial goals.

When you are needing to justify (again, people always try to use logic after bad spending decisions) why you are spending money on things you didn’t actually plan on purchasing, or realize that you regularly spend over your budget, you definitely have an emotional spending problem.

Watch small purchases! They all add up. Don’t think big ticket purchases are the only kind of emotional spending that will break your bank. Small incremental and emotional purchases are actually the ones that can do the most harm. Spending $50 on Amazon each week might not seem so bad, but by the end of the year this will actually end up costing you $2,600.

When looking to control emotional spending, the absolute first thing you should do is create a clear budget for yourself. Allow yourself to still be able to spend on unplanned purchases, but know that there needs to be a "hard limit". A good way to stick to this is by creating a separate savings account for yourself and labeling it for e.g.: “fun spending.” This account will be used for purchases off of your Amazon Wishlist and your late-night trips to Target when you’re bored. 

It's also not a bad idea to make use of the tracking features offered by your banking app. If your not a fan of  this option, you can also download a money management app and use it to track all spending. Our company has also created a 

tool that shows how much you could potentially save with our debt relief program. Nonetheless, when your monthly summary shows you’ve spent $90 on junk food at the gas station, you’ll KNOW it's time to make a change. Tracking your spending will help you see the impact all purchases make in your finances, as well as allow you to stick to a solid budget.

If you take the following action, emotional spending can be a thing of the past. And you can leave the knickknacks where they belong... in the past. 

What is emotional spending? If you constantly need to justify purchases after you’ve already made them, then you probably have an emotional spending problem.

What is Emotional Spending?

    I’m not here to list the 7 best ways to make better financial decisions. It’s not really necessary. And odds are, you’d probably forget most things on that list after a few days anyway.

You don’t need a checklist of 10 different things to make better financial decisions. All you need is a different “financial mindset” and the ability to ask questions with regards to the purchases you make on an everyday basis.

And that mindset can be broken down and simplified into one easy rule of thumb: “Opportunity Cost”.

What I’m going to discuss isn’t a “secret”. It’s a simple economic principle and in many ways a common-sense way of evaluating your personal finances. It’s been adapted by the likes of Warren Buffet and countless others.

It helps keep you centered and helps you properly evaluate any financial decisions that come your way.

Oxford Languages defines opportunity cost as: “the loss of potential gain from other alternatives when one alternative is chosen”.

That definition may sound somewhat confusing, but it’s really not—once you break it down into plain English and provide some examples.

Opportunity cost is “what you would miss out on by making your current choice”. So, if you have $20 and you spend that $20 on lunch, you cannot use that same $20 to buy bitcoin.

Let’s put it another way. Let’s say you applied for two jobs that are nearly identical; one job pays $25 an hour and the other pays $30 an hour. What position should you take? We should all unanimously agree: the one that pays $30 per hour is the right choice here.

Now let’s add more variables. Let’s say that the $30 per hour position also has a 1 hour commute each way and the odds of you being promoted seem somewhat slim, since management seems to be very locked in place. The $25 per hour position is a smaller company that seems to be trending upward and you have the added benefit of being able to work from home. You’ve already built up rapport with some of the team members and management.

What is the right decision in this scenario?

     There might not be an easy answer, but if this position is in a career path you want to stick with, the $25 per hour position might be the better bet here.

If it’s not your permanent career path, you might lean more towards the $30 per hour position, since it will allow you to earn more in the short term.

This is how you evaluate the opportunity costs of any financial decision. By asking questions and trying to get an aerial 360 view of the impact your decision will have on your life.

We see consumers make the wrong financial decisions 

. In 90% of these instances, it stems from an error in properly evaluating their money and not understanding how to implement an “opportunity cost” framework.

We’ve seen countless consumers contribute to a high yield savings account, while still paying a 25% APR on their credit card debt. This is wrong in so many ways and why many consumers are always in search of a 

. Although, having money in a savings account may make you feel more at ease financially, it is not the right thing to do when you are paying an outsized amount of interest on your other obligations. This leads you to a false sense of financial security and does not make any “financial sense”.

Why does this framework help us make better decisions? The simplest reason is that it forces us to ask questions that we may overlook or ignore.

    Opportunity cost is originally derived from a very common economic principal. It stems from the idea that any given business should allocate its resources towards that which most increases its productive capacity. Capital and resources should also go towards an industry in which said business has a competitive advantage.

So how do you apply this principal to your personal finances?

Treat your money like “a business” and always allocate your resources towards your highest earning capacity.

The more questions you ask about the financial decisions you make the better you will be at adopting this practice. It might seem like such an easy and simple thing to do but it’s a tactic that is highly underutilized.

The simplest way to help you adopt this mindset is by asking questions that will allow you to make better and more informed money decisions.

Here’s an example: Let’s say you want to buy a car.

How do you treat your money as a business?

Let’s say you have a $1,000 in savings. You can either allocate that savings towards paying off credit card debt, investing in the stock market or spending on personal leisure. Depending on what’s going on in your life, there are multiple scenarios in which any of the above could be the right financial decision for you.

However, barring any personal preferences, money-wise, the best order of operations is to get rid of debt, then invest your money and then spend on leisure. That is the path of patience and what a savvy consumer would do.

If your investments are fruitful, it may produce enough of a return to pay for any leisurely expenses a year or two down the road. So, patience is key here!

The order of priority for spending from people that make good financial decisions should always be as follows:

1. Reduce your debt obligations so you pay less interest

2. Invest for the future so that you can earn a return

Why do some people make better financial decisions than others?

     Everyone has their strengths and weaknesses but the individuals that are time and time again making the wrong budgetary choices usually don’t budget at all and are much more likely to borrow money “heedlessly”. In many ways, taking out a loan can be a sure-fire way to “rob your future self”.

Consumers that outperform their peers tend to have a financial plan in place and use a monthly 

 to get their finances in order. They are consistent and steadfast in their spending and although they may splurge, they always try to maintain a good “medium”.

If you are simply taking out a loan because you got an advertisement for a good interest rate or to go on a vacation, then your head really isn’t in the right place. This is an all-around terrible idea.

And this is actually becoming a trend; these loans are referred to as “travel loans” or “vacation loans”.

Whenever you are borrowing money simply for “leisure” it is going to a very bad financial decision.

Psychologically speaking, borrowing money to “reward yourself” with a vacation also has the added effect of rewarding yourself for bad financial behaviors. This is a double whammy and is the exact opposite of what you want to do. It’s the hallmark of individuals that make bad financial choices.

How to Stop Making Bad Financial Decisions

Although, it’s important to make good decisions some might argue it’s even more important to avoid bad decisions. Bad decisions most often arise due to us following our desires and misguided impulses. The easiest way to stop them and stop falling into the same trap is to recognize when this is occurring. Before you make any type of purchase with a credit card or take that cash out of your wallet, take a breath and try to truly think about what you are doing. If you slow down beforehand you can stop yourself from making a lot of irrational financial decisions.

What are some of the main precursors to bad money decisions, might you ask?

 – When we have too much free time on our hands, we are left alone with our base instincts and desires for too long. If we stay productive and focus on the good things in our life, we are a lot less likely to fall into this trap! Staying busy and employing gratitude within our daily lives will help eliminate a good chunk of emotional spending and bad money moves.

– Emotional spending can lead some people to financial ruin. If you don’t safeguard your mental health, it’s going to be very difficult to get a grapple on 

 and restore your financial health. These things tend to go hand in hand, so definitely exercise caution and always make sure to take care of your mental health! Emotional spending is at its worst depending on the “state” and “mood” you’re in. So, how then do we stop it? Patience. Patience is the number 1 deterrent to stopping emotional spending. If you can exercise patience you’ll have already won half the battle.

 – Buying an endless supply of stuff won’t fill the void. Often times our perception of quality of life and happiness is based much more on expectations than anything else. Our state of wellbeing is relative. Someone with a lot less material wealth can live a much more fulfilling life than someone who appears to have it all on “paper”. Moreover, people tend to get accustomed to improvements in their quality of life within a year’s time. So, if you won the lottery, after a year, all relative newness and joy will fade and revert back to the mean. The moral of the story is, “you can’t buy happiness so stop overspending on it”.

Opportunity Cost Mindset & Framework for Decision Making

Adopting an opportunity cost framework forces us to ask questions we overlook and can help us make better financial decisions and stop making bad money moves.

How to Make Better Financial Decisions by Adopting an Opportunity Cost Mindset

How to Make Better Financial Decisions

A Guide to Getting Out of Debt When You Feel Trapped

Debt isn’t fun—by any means. Ask anyone that operates a struggling business. Ask the US government. Ask a medical student or anyone still repaying student loans years after the fact. You need not look too far, as the odds are that you or someone you know is very familiar with debt.

However, of all the different types of debt out there. The worst of all has to be credit card and personal loan debt. This is why many consumers decide to utilize services that offer 

Credit card debt really takes the cake on this one. As anyone that has previously dealt with the vicious cycle of trying to pay down revolving lines of credit or credit card debt knows, making even a modicum of progress on your debt obligations is by no means—an easy feat.

At times it can feel like it literally drains the life out of you. The process of actually getting rid of all your debt can become an extremely intensive and overwhelming process.

Credit cards—by their very nature—are designed to keep you in debt, so that your creditors and banks continue to collect high interest payments throughout the process. This is their bread and butter!

Depending on your APR and balances, if you were to only make minimum payments on your cards, your payback and amortization period could range anywhere from 10-25 years. Meaning for a complete payoff of each individual credit card balance, you’ll like be paying for decades.

Also bear in mind, the above repayment period is factored and based on you never making any additional charges with the credit card again. If you still use the cards regularly, eliminating that balance can feel next to impossible.

Once you become trapped in this vicious cycle, the psychological impact it can have on your daily life can also feel devastating and has been known to ruin relationships with friends and family (especially if you try going to them for financial help).

For anyone currently feeling “stuck”, please understand that your current situation is only temporary and things will eventually get better.

If this is something you wish to tackle of your own accord—your foremost priority should be to setup a proper budget. Account for you monthly expenses and do a side by side with your monthly take home income.

If you don’t have time to put in the work or don’t think it’s something you will able to tackle on your own, there are other viable options you can take.

If you are currently one of the Americans that feels trapped in a vicious battle against revolving debt (don’t worry you are not alone), you have options. Often times your best bet may be to seek help by enrolling in a 

Although, debt relief companies may sometimes get a bad reputation (due to a few bad apples in the debt relief industry), some organizations like “The Debt Relief Company” actually do the right thing by their customers.

So, exactly how do you decipher between the good debt relief companies and the bad ones?

It’s pretty simple really. First, make sure the debt relief program you are inquiring about does not have any upfront fees or hidden costs. As per the FTC guidelines on settling credit card debt, any legitimate and trust worthy debt relief company will never charge any advanced fees.

Some of the shady actors in the debt consolidation industry chose to disguise themselves as law firms in order to bypass this—since law firms are technically allowed to charge up-front fees—but do not be fooled.

Moreover, make sure to ask great questions and make sure the debt relief firm is not providing you with misguided and unrealistic expectations. Any company that promises to settle your debts for “pennies on the dollar” is usually lying through their teeth and shouldn’t be trusted. If the process was that easy, everyone would do it.

Finally, as with any debt relief or debt settlement option, you should expect to have negative consequences to your 

Good debt relief companies will pave a path for your success in the program early on and set realistic expectations—not mislead them into believing they are receiving a 

 or that their program is too good to be true.

Great debt relief companies will have set tactics regarding how to avoid 

 calls and make your transition into the debt relief program as seamless as possible.

Likewise, even companies that don’t charge up-front fees can be prone to providing subpar services. Some companies will drop clients if they receive a summons/litigation or settle smaller accounts first so that they can charge their fees first (even though it may inevitably lead to a client’s program becoming unsuccessful). The best debt relief programs will charge the lowest percentage of fees, get the best results for their client, have superb customer service and perform all the heavy lifting—so that all you really have to do is kick back and make your monthly payment. The right debt relief services could be the easiest and best path available to you if you are dealing with a significant amount of unsecured debt and don’t really have the confidence to tackle everything on your own. For those of you that are more DIY oriented continue reading below.

Going this route is definitely recommended for individuals that are self-disciplined, have smaller credit card balances, less aggressive creditors, and therefore a lower likelihood of receiving litigation on any one credit card account. Some consumers can also take advantage of balance transfer options but be careful as 

 and don't always provide a direct solution. Although, you may not have the years of expertise and financial know-how of a debt consolidation company, negotiating on your own credit card debt is not an insurmountable task—not by any means. Yes, there are definitely more associated risks with going this route since you are essentially shooting a basketball in the dark but if you do your homework—it could work out quite well.

Your first step should be to stop paying your creditors and minimum payments (the debt relief industry refers to this as a strategic default). Stopping your payments will bring your creditors to the negotiating table and show them that you mean business. Since the creditors do not want you to give up on paying them back they will be much more willing to negotiate with you. After this you will want to claim financial hardship and begin the back and forth negotiations with your creditors. Beware this is not an overnight process and will require an extensive amount of work on your behalf. Try to stick firm to your payback terms and get the best possible deal from your creditors as possible. Once you’ve reached an agreement with your creditors make sure to get the terms of settlement in writing and make timely payments on whatever term agreements you reached with them. If you do miss a payment by the set dates it could void the entire agreement setup with them, meaning your payments would be applied to back interest you owe and not towards the debt resolution agreement. For those interested in going this route feel free to research more on dealing with debt as per 

Regardless of what option you chose to move forward with, you really should aim to reduce your expenses and put aside monthly savings with both plans. Whether you’re saving a tremendous amount of each month via a debt relief program or increasing your cashflow by going the DIY debt negotiation route—putting money aside for a rainy day is always recommended! Sometimes we experience a change in income or unexpected expenses arise, when this occurs, we can’t continue to live with the same spending habits. We all have to adjust to our circumstances and learn to live within our means.

Apart from reducing your monthly expenses, you can also work on increasing your income. Whether, you do so by getting a second job or by generating passive income (definitely easier said than done!) it’s totally up to you. Regardless, sometimes generating some extra cashflow each month may greatly help your financial situation.

In conclusion, you should never be afraid to try doing things on your own or be afraid to ask 

 options and what they entail. Whether you choose to take things into your own hands or go with a trusted company to help is totally up to you. Both options are viable for paving a path towards your future success and financial freedom—it really just depends on you!

Credit cards are designed to keep you in debt with high interest payments. Break free from this vicious cycle with our guide to getting out of credit card debt.

The Vicious Cycle of Revolving Credit Card Debt

How to Take Control Back from Your Credit Card Debt

What Credit Card Companies and Banks Don't Want You To Know

We are constantly being reminded that the economy and stock market is at an all-time high, but not all Americans are entering the new decade with exceptional credit worthiness or stellar finances—not by any means. Many of us are just barely managing to get by each and every day. Regardless of your income and what state you live in, the US has become an expensive place to live. Inflation and the cost of living has far exceeded growth in wages for over a decade now. Being able to live comfortably as an American has become no easy feat. While, a small percentage of Americans are entering the new decade with prosperity in mind, many aren't and those that have been left behind are looking for ways to avoid living paycheck to paycheck and find new ways to get ahead in the new decade.

The first and most important step you can take in order to better your financial standing and better tackle any credit card debt you may have is by budgeting. If you need help with budgeting and you are carrying credit card debt feel free to reach out to us for a 

. This is the only way to reasonably assess and evaluate your financial strengths and weaknesses. In order to figure out where you stand financially, you must subtract all your monthly liabilities from your monthly take home pay. Whatever is left over is what you have to work with each month (otherwise, known as your monthly disposable income). If you have amazing cashflow and earn a lot of money each month but have too many liabilities and expenses, you can start creating a plan to cut down on costs. Once you have everything mapped out you can begin formulating a plan to put aside any disposable income and use it towards paying your high interest credit cards and unsecured debts (since high interest debt should always be your top priority).

If you simply do not have enough money or disposable income to aggressively pay down the 

 on your own, you can look for other viable debt relief options offered by most financial institutions. The most important financial options and debt relief services to help with credit card debt are as follows:

If you need help with credit card debt, you might assume that bankruptcy is an extreme option to take help your financial situation. And you would be absolutely right, but it is still a solution to help with indebtedness nonetheless. In recent years, filing for bankruptcy has become a very difficult feat, it is no longer the easy and fast escape plan it used to be and for good reason—bankruptcy should be left on reserve as a last resort option. Ever since the US federal government passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (

), the filing process has become much more strenuous to dissuade many from abusing the option. If you want to claim bankruptcy you really need to understand the ramifications. Firstly, 

 is public knowledge, you will typically have no credit for 10 years and and will essentially be blacklisted for almost all credit opportunities in the near future. Moreover, it's important to understand the difference between a Chapter 7 and Chapter 13 filing. A Chapter 7 will absolve all your debts entirely while a Chapter 13 filing will require a partial payback of the debts forgiven. If you don't actually qualify for a Chapter 7 bankruptcy and wish to proceed with the filing you will have to go the Chapter 13 route (which is usually not the best option). Chapter 13 bankruptcy is very similar to a traditional debt settlement option in that it will restructure your debt obligations to allow for a partial payback of debt owed. So many individuals looking for a feasible debt repayment plan, Chapter 13 tends to be least advised since you will still have many of the negatives associated with doing a bankruptcy with the positives of eliminating your debt scot-free. Either way, you will be put on a strict budget and still be required to pay back a portion of what you owe.

There are a multitude of debt consolidation options in the financial services industry today that can help with credit card debt. Ranging from a debt consolidation loan, debt settlement program, credit card consolidation and debt resolution programs all the way to credit counseling and 

 programs. Debt Consolidation loans can be a great option if you are able to qualify for one with a decent interest rate. However the irony here lies in the fact that most people that qualify for debt consolidation loans are typically individuals that do not need the loan. The catch-22 of credit. However, 

 are usually a highly attractive option if you do manage to qualify for one that will save you money on interest payments. You will have one lower monthly payment and should ideally be saving a good amount of money on interest. However, the individuals that need a consolidation loan the most are usually the ones that won't qualify for one. Besides a traditional consolidation loan option, you could also choose to go the route of a debt settlement or debt resolution program. A trusted debt relief company can help eliminate your credit card and personal loan debt by negotiating with creditors to pay back less than what you owe. The good thing about this option is that you are able to forego the detrimental impact of doing a bankruptcy and still save a significant amount from your principal (without paying any interest). It is essentially the middle option in between a consolidation loan and a bankruptcy, so you would have less savings than a bankruptcy but also a lot less negatives.

Debt relief and debt settlement programs have seen a significant resurgence as of late and has been one of the better options in providing individuals with credit card debt help. Although, for a long time the debt relief industry has been synonymous with bad acting companies that only care about corporate profits and provide lackluster results while charging clients up front fees. Due to heavier industry regulation and stricter FTC guidelines, there are some 

 that actually take of care of their clients and do not charge up-front fees. Debt relief programs are relatively straight-forward in nature and allow clients to pay back less than the full debt amount owed. Moreover, debt settlement is not a loan option and is therefore a 0% interest option. Since customers that enroll in a debt relief program are not utilizing a loan to pay back their credit card debt they do not pay any interest in the program. Debt relief programs utilize an FDIC insured saving accounts to accrue funds that are disbursed to creditors throughout the course of the 2-4 year program. Although, these options tend to have some negative impact to your credit worthiness in the short term they are not permanent like a bankruptcy would be and they still allow you save nearly just as much money. All options have their associated benefits and downsides, however, debt relief programs tend to be viewed as the industry goldilocks zone for debt relief options since they help consumers save a significant amount of money and have some and do not have many negative consequences.

The potential for achieving alternate streams of revenue in today's society is literally limitless! So, if you do not like any of the above 

 you can always try to get a second job or start a business venture on the side. Although, this is usually easier said than done and starting a business will typically require a reasonable amount of investment, it is still a viable option to increase your income. Many extremely successful entrepreneurs have experienced financial hardship and times of extreme uncertainty, so understand this is just one point in your life and everything tends to eventually revert to the mean (meaning if you're down now things won't be that way forever). If you are an extremely hard working individual looking to get your life back on track and take control of your credit card debt this may be the best solution for you. There is no shortage of ways to earn side income nowadays (you could even start writing for a blog!) and many times these side ventures can lead to a complete career change! If you are to be dedicating time and resources to these entrepreneurial ventures, whatever you chose to do, make sure it's something you are extremely passionate about. Otherwise what is the point? There a million different things you could be doing with your time. Life is too short to not make the best of every day and every opportunity handed to us.

Happy New Decade and blessings in the years to come!

There are many options to help you take back control from your credit card debt. Here is our review of the ones we think can be the most helpful to you.

 option is the absolute best choice for your current situation, it's crucial that you consider your circumstances. What may appear to be the best option for you will not be the best decision for someone else.


To assist you in making the best financial decision possible, we've provided a look at the most prominent choices available to you and how they will impact your credit:

Credit Counseling and Debt Management Options

How Do Debt Relief Programs Affect Your Credit?

Debt and credit go hand in hand. So, if you have a lot of debt, odds are: you may already have poor credit.

 will have an impact on your credit score. How significant the impact will be is highly dependent on where your credit currently sits. Someone that has a 740 credit score will see a more pronounced impact than someone with a 610 score.


The utilization rate associated with your revolving debt makes up approximately one-third of your overall credit rating. So, if you have a high utilization rate, your credit is probably not be in great shape already.

However, one thing to note, each time you repay your debt, your credit rating will always improve with it. And this is particularly true with revolving debt like credit cards, as the balance gets closer to its maximum limit your credit will be negatively effected, and vice versa. For this reason, it is always advised to keep your utilization rate below 30% to avoid having an impact to your credit worthiness. The

coronavirus pandemic has significantly impacted credit

 for all Americans, so it's important to stay on top of your finances.

Although, lowering your debt is never a bad thing and will never have a negative impact to your credit worthiness, if you close an account in conjunction to paying it off it may actually lower your credit score! As an example, paying down debt and then closing that one account may lower the overall age of credit accounts and utilization rate, which comprises about 20% and 15% of your credit score, respectively. One common misconception about credit is that having debt is good for your credit, but this is just simply false! Have high credit availability is good for your credit, having high credit card debt is never good for your credit.


The kind of debt relief plan that you employ can also negatively or positively impact your credit rating. Some debt settlement and debt relief options, make use of some strategies that may have a more damaging impact than other sorts of debt relief plans and programs. Keeping your current credit score in mind, some debt relief programs may not have much of a negative impact at all, if your credit has already taken a hit.

The Strategic Nature of Debt Relief Programs

After you have a better understanding of your credit worthiness and the possible impacts any options can have on it, you can choose three different ways to employ debt relief for your particular financial situation. These methods include the snow-ball method, debt-consolidation, and credit counseling. Each debt relief option has its own associated advantages and disadvantages and its own impact on your future credit standing.

The Debt Snowball and Debt Avalanche Methods

The debt snowball and the debt avalanche are both tried and true methods of paying off your debt. The selection between snow-ball or the avalanche often relies on a matter of your personal choice.


The debt snow-ball is actually when a person repays your debts one by one, beginning with those that have the lowest balance first. This reduces those debts and the interest payments associated with those accounts and helps you rebuild your credit quickly.

While the debt-avalanche is when you repay your debts one after the other, but you begin with those that have the largest balance. However, the debt avalanche method takes more time to completely pay off debt and rebuild your credit score, you will be getting rid of your debt in a large and more impacts way. This method requires more significant payments be applied to a larger chunk of your overall debt total.

At the end of the day, both options are much better than just making your minimum payments as that will end up getting you no where. Additionally, so long as you go continue to make your required payments on all accounts while you use these methods you will see an improve in your debt to income and credit worthiness. Both of these methods may be suitable to your financial situation and if you stick to them in the long term they will definitely have a positive affect on your credit worthiness and save you money from interest you would’ve otherwise paid.

 loans and money transfer cards can assist you to manage the debt just by gathering some multiple credit lines under only one loan or a card as per your needs. Although this may help by helping you make one payment instead of several, it’s not a strategy that really gets you debt-free. You are borrowing to payback what you already borrowed! Although if you have outstanding credit this option may be suitable to at least get you an overall lower interest rate and have one more manageable monthly payment.

Loan consolidations may often offer lower rates of interest than the original lines of credit themselves, which definitely lets you pay down the debt easier and faster. Additionally, having only one lower payment per month makes it much easier to prevent late or missed payments and are much more convenient for your financial planning overall.

Credit Counseling and Debt Management Guidance

A credit counselor is an adviser that assists you to manage and pay off your debts via budget planning. According to 

, credit counselors are typically non profit companies that will attempt to assist you in managing your money and create a financial budget and plan to help you re-establish a good financial standing. The problem with credit counseling is that they typically still charge a substantial amount of money (even though they may be non-profit organizations) and most people that enter credit counseling programs do not tend to finish them. Although debt relief programs may sometimes get a bad reputation, they do tend to be more effective than a lot of credit counseling options. Debt relief programs may negative affect your credit but they will at least get rid of the underlying debt issue. Before you sign up for any option, debt relief or counseling, always make sure you know about the possible impact the debt relief plan will have on your finances. Ask questions and make sure you do your due diligence on all companies!

No matter which method of debt relief you have chosen, the ultimate goal should always be to repay the debt and save as much money from interest payments as possible. By doing this, you will be able to save and invest in your future. If you are not making progress on your current debt obligations, a temporary hit to your credit may very well be worth the various debt relief options available to you. Your ultimate goal should be to pay back your debt and save money! It should not be to worry about building your credit, because often times, debt is the underlying issue that is keeping your credit poor in the first place.

When choosing which debt relief option is the best for your current situation, it's crucial that you consider your circumstances. Each situation is unique.

Debt Relief and Credit Worthiness

Debt Relief, Debt Consolidations and Why So Many People Confuse These Terms.

Okay, so first things first. By definition, a 

 is the action or process of combining a number of things into a single more effective or coherent whole.

Stock prices go through a consolidation process — although as Donald Trump would surely tell you — they’ve mostly just been going “up” lately. That snooze fest five-year period where Disney stock went back and forth from $90 to $120 for five years, making every grandma that gave their grandkids Disney shares for Christmas look like terrible stock pickers (Thank you Nana — I held them lol), that was actually a period of consolidation.

An estuary is the result of a consolidation. YES! An estuary, ladies and gentlemen. Literally one of Mother Nature’s most magnificent examples of a consolidation (sorry igneous rocks and soil consolidation). A freshwater river flowing into that eventual point of connection with the sea, morphed and merged, in order to create something entirely different — an ecosystem better suited for different types of life.

When you’re a child, your knowledge and understanding of the world consolidates until you become self-aware and perceptive. Hell, even our lives go through a consolidation process (i.e., my incoherent and ever-confusing NYU college years helping me transform into the reasonably coherent man I am today).

So now that I’ve gotten my point across and you as a reader fully understand that basically everything is a consolidation, let’s clear some things up.

 can refer to a multitude of different debt relief options. So, the insane amount of consumer confusion that occurs with these options and in this industry as a whole is 100% understandable. Debt resolution programs, debt management programs, debt consolidation loans, debt relief programs, the list goes on and on. All of the above options are technically a debt consolidation. When you have 10 credit card accounts with balances and you begin making just one payment for whichever of the above options, you have one consolidated monthly payment. But the differences really end there. As each has its own financial implications and benefits.

Consolidations can help because they make things easier and simpler. The genuine idea is that if you have separate but similar financial products or goods, the act of combining them into one should make your life easier and add value. It makes sense in theory, but all these options are actually very different and the best one for you really depends on your situation.

Debt Consolidation loans are really hard to qualify for (sometimes you also have to collateralize them with property) and a lot of times they don’t really save you much in interest payments. These options will really depend on your overall 

. Loans are definitely not recommended for the fiscally irresponsible (bare in mind your credit card balances will go to zero with this option — don’t be tempted!). In addition, with a consolidation loan, you are basically robbing Peter to pay Paul. However, if you can qualify for a decent debt consolidation loan this may likely be one of the better options.

 or debt settlement programs are great options for most since they provide the most payment relief. With a debt settlement program, you are negotiating an entirely new payback term with the creditor and paying back less than you owe. So, this option will typically provide the most saving. However, they are only recommended, if you can find a trusted company and their ability to collect fees is contingent upon your success in their program. The principal savings they provide for you should be tied to the debt relief company and its ability to collect fees from you. This way, they are incentivized to do the absolute best job for you. If the debt relief company charges up-front fees — watch out — as that is a major red flag. No honest company will take fees before they are able to save you money. Moreover, this option is not recommended for someone that needs their credit as high as possible and plans on acquiring a home mortgage in the near future.

 (DMPs) are options in which you pay a monthly fee to a company that will negotiate better interest rates with your creditors. The fees you pay typically outweighs the benefit from savings in interest payments and leaves you with little to no payment relief. However, this option typically has no negative impact to your credit worthiness and should be considered a viable option nonetheless.

Whichever option you decide to go with, just make sure you do your due diligence and research accordingly. 

And when someone mentions a debt consolidation, your follow up question should always be: “what kind of debt consolidation?".

Debt relief, debt consolidations and why so many people confuse these terms. The definitions and differences between debt relief and debt consolidation.

The term debt consolidation is often confused by many consumers and for good reason. Here are the real differences between debt relief and debt consolidation. 

Debt Relief Blog