Debt is not bad, but you can have too much. The media talks a lot about debt these days. Most of the talk is negative because Americans, as a whole spend more money than they make. This negative savings total is a dangerous trend.

It would be nice to be debt free and have all the things you want in life but that is not possible for most of us. Debt can be good because it allows you to leverage your money and own things you would not be able to otherwise (homes for instance). Following are some simple tips that let you know if you have too much debt and how to be smart about going into debt.

First, take a look at your ‘debt to income’ ratio. This ratio is the percent of your gross income (before taxes) you pay for loans and finance charges. If your ‘debt to income ratio’ is less than 40% you are in good shape. This means less than $40 of every $100 you earn is committed to loans and finance charges. If you are between 40-50% you are considered in the ‘high’ category. Over 50% and you should find a way to reduce your debt.

To go a step further many institutions specifically look at your primary residence ‘debt to income’ ratio as a separate indicator. If your house payment is between 28-33% you are in good shape especially if your overall debt to income is below 40%.

Look at your personal situation, compare it to the ratios above and determine if you need to take action. Too much debt makes it hard to save money for retirement or life’s major expenses… here’s why.

Assume your ‘debt to income’ ratio is 50% and you pay 20% of your income in taxes. This means 70% of the money you earn is committed to loans, finance fees or taxes. Visualize that all the money you earn between January 1 and the middle of September (70% of the year) is committed. You only have 3.5 months of income to pay for groceries, repairs, discretionary items or build your savings. The less debt you have the sooner you are free to concentrate on other important financial matters.

Another important point to consider is try to limit your borrowing for things that usually appreciate in value. Real Estate comes to mind, but after that the list is real short. If you get a five year loan to buy a car, look at the situation you will be in when the loan is paid off. The car is typically worth a fraction of what you paid for it. In addition you have paid a large premium to the original purchase price because of interest. Leasing may be a good alternative if you can not afford to pay cash.

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Credit card debt counseling debt consolidation can be a great way to help eliminate your debt. Unfortunately, in today’s day and age, many people exit college and find themselves those buried in debt. Counseling can help you shatter your debt and achieve financial freedom.

Credit card counseling debt consolidation is best suited for you if you are making huge payments every month towards your credit card dues. Sometimes you feel that the credit card obligations are never going to end and you will be earning only to meet their repayment schedules. If you miss the credit card payments, you run the risk of bad credit history attached to you name.

This is not a very ideal situation to be in indeed. It is here that debt consolidation and counseling can help you have a grip over your financial situation again. You can also work towards the goal of debt free through credit card counseling debt consolidation.

Debt consolidation as a financial strategy is intended to bring your financial position to a healthy state. Remember that as you keep on servicing credit card dues months after months, you also forego the potential savings and other investment avenues.

Through counseling and debt consolidation, you can have peace of mind and also aspire to manage your debt in a better way. It is a good way to say bye-bye to financial stress and a feeling of being trapped in the mess.

Today, a number of financial doctors and websites offer you relief and credit card counseling. You can get a free and detailed and customized debt management program to meet your financial objectives and objective calculations sheet to make a decision.

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If you didn’t already know, Christmas is coming. It’s quite obvious really as the toy companies, other corporations and malls have already started with the onslaught to part people from their hard earned cash. That wouldn’t be such a tough thing to swallow if it we’re December – but it isn’t.

The campaign is often both routine and brutal. The pressure to be a good partner, parent, brother, sister, cousin or friend is constantly applied as you are pulled this way and that way in order to get people to buy the ‘perfect’ present. In fact as a result many will spend to provide multiple ‘must have’ gifts. And to what effect? As well as taking away from the enjoyment, many people have spent more than they can afford. The January period is well known as the period when credit card and mortgage payments are missed. Added to that credit companies ramp up their activity for this period also because they know the hunger for loans is at its highest. Hardly a recipe for happiness is it?

Christmas has become about instant gratification. The need to make someone happy for a very short period. Why a short period? Because, as a society we’re becoming like junkies. We need a constant fix to keep us entertained. We need more and more to make our lives perfect. This fix usually goes hand in hand with the assumption that good gifts are expensive gifts. Too often, people follow this behavior and over-extend themselves financially

The result is we strengthen this kind of thinking with each passing year and as such become increasingly reliant on credit in order to meet the demand of Christmas.

Many will miss the opportunity to buy their best Christmas gift this year. That gift? Opportunity. As opposed to try and feed instant gratification, how many have considered a gift that could help provide close ones the things they desire without the heavy burden of debt. Such gifts can take many forms. These can include books on entrepreneurial skills, courses. The list is only limited by the buyer’s imagination. It’s a variation on the saying, give a man a fish and you feed him for a day – teach a man to fish and you feed him for a lifetime. Such a gift could light that spark that takes a person to life they only ever dreamed of. What a great gift it could be if they never spent another Christmas worrying about money.

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There are few industries that are as permeated by myths, misinformation and controversy as is the debt settlement industry. It is my goal to provide truthful, factual, unbiased information in order to dispel the confusion and misinformation.

Unlike debt consolidation companies (that forward your monthly payments to your creditors), debt settlement companies place your monthly payments to them into a trust account, then forward the money to your creditors when there is sufficient funds in the account to pay a creditor in full.

Debt settlement companies advertise that they can negotiate with creditors to reduce debts by 40% to 60%. Is this really possible? Not if you believe what you read on the Internet, which offers many pages of compelling arguments against the efficacy of debt settlement companies.

Do you believe everything you read on the Internet? Let’s think this through. If you were a creditor, would you be willing to allow your debtors to pay only one-half of what they owe you? Obviously not.

But what if your debtors were noncollectable, in other words, they refused to pay you and they were in a position where you could not collect from them by levying their bank accounts, placing liens on their properties or garnishing their wages. Now, would you be willing to take a reduced amount? Your choices are – 50% or nothing. Which are you going to choose?

The truth is – of the thousands of debt settlement companies, there are a few that can negotiate or settle debts by 40% to 60% as advertised. But they charge fees upwards of 15% of your debt.

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