Feb

10 Steps to Help Someone in Debt

site management on February 24th, 2010

10 Steps to Help Someone in Debt
By Wesley E Anderson

Step 1. What you will want to do first is talk to the person in debt and discusses what the major factors are in them not being able to make payments to the debtors.

Step 2. If you have been in debt before, you will want to share personal experiences with them about overcoming financial distress. These can be stories from your own life or stories from the lives of family members or friends. This will let them know you understand their struggles and that they are not alone.

Step 3. Ask as many questions as you can so you can know how you can help. This may be all that is needed. They may have a list of ideas for you. If so, follow through. It may be as simple as cutting up their credit cards.

Step 4. It will be imperative for you to refer that person to a professional if f you do not have the financial background or understanding needed to help them. Explaining to them the dangers of high interest loans, minimum payments can get quite complicated.

Step 5. Eventually you will need to find time to sit down and go over in detail their financial income. This will begin to help them start thinking in terms of necessary and not-necessary. That way you can get a good idea of their spending habits as well as their saving habits.

Step 6. Grab a piece of paper, and create three categories; one for necessary, another for pleasure, and one for things they need but don’t have money for. After you do this, go back over the spending reports and put each item into the appropriate column.

Step 7. In this step, help them discover free, or low cost methods, they can use to have family time.

Step 8. Add up all the money they have spent on extraneous items. Then, when all is accounted for, ask them what they can weed out. After they do that, add it up again and create a new budget, taking the money saved and applying it to the items they need but didn’t have money for.

Step 9. Counsel and ask them how you can help them stay on their budget. You can order money management software to help keep records. In addition to that, the people you are helping will be able to manage their own finances.

Step 10. Lastly, under these circumstances, if you are concerned a friend or family member is creating a financial disaster for themselves; encourage them to seek professional help from a counselor specializing in a particular financial circumstance like tax help and budget control.

You will want to visit my Digg to find out how to help yourself and others situate their own debt.

http://digg.com/business_finance/Learn_How_To_Fix_Your_Own_Credit

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