Most people have some debt, whether for a home loan (mortgage), car loan, student loan, or credit cards. The key is to manage debt so that it doesn't get out of control. The best strategy is to control spending and avoid burdensome debt in the first place. But if you find yourself struggling with debt or a blemished credit record, you're not alone. Be proactive.
Dealing with too much debt. You can conquer debt with a variety of methods, from negotiating payment plans with your creditors to -- in extreme cases -- declaring bankruptcy. For more information about bankruptcy, see Nolo's Bankruptcy FAQ. For more information about dealing with debts and creditors, see Nolo's discussions of Debt and Collection Agencies and Student Loan & Tax Debt.
Improving your credit report. To rehabilitate your credit report, check it regularly, and ask the credit bureaus to remove out-of-date and erroneous information. Then focus on getting positive information into your record, such as a solid record of on-time debt payments. And don't fall for the numerous credit repair operations that charge money for tasks that you can easily handle on your own. For more information on credit repair, see Nolo's Credit Repair for Bad Debt area.
If you haven't already started planning or saving for retirement, there's no time like the present. Popular retirement plans such as 401(k) plans allow you to put aside money for the future, while at the same time reducing your current tax bill. If your employer offers a 401(k) or other retirement plan, it makes sense to contribute as much as you can afford into it -- particularly if your employer matches your contribution. For more information, see Nolo's Social Security FAQ and Retirement Plan FAQ.
Even if it feels too early -- or too creepy -- to think about what will happen to your finances when you die, it's a good idea to tackle this planning sooner rather than later. Having a will ensures that your property -- even if there's not much of it -- will be inherited by the people you choose. And other estate planning tools, such as living trusts, can save your inheritors significant tax dollars and attorney expenses. For more information, see Nolo's Wills FAQ and Living Trust FAQ.
Money is better than poverty, if only for financial reasons.
-- Woody Allen
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