Debt Management & Debt Freedom

With personal debt nearing the £1.5 trillion mark, the average UK citizen is spending more than ever servicing their debts.

* In 2007, according to Unbiased.co.uk, 1st February was Debt Freedom Day – the day when the ‘average person’ had earned enough to pay the annual interest on their debts.
* In 2008, the website announced that 10th March was Debt Freedom Day.
* In 2009, it fell on 25th March – nearly three months into the year.

Debt management – reducing the cost of debt
When they simply can’t afford the monthly payments to their debts, many people turn to debt management. They – or a debt management organisation acting on their behalf – will get in touch with their lenders and ask if they can help them repay their debts at a rate they can afford.

There are various things a lender can do to help. First of all, they can agree to accept lower monthly payments, helping the borrower stay on top of their unsecured debt payments without ‘eating into’ the funds they need for essential spending such as mortgage/rent, food, utility bills, etc.

As well as accepting lower monthly payments, each lender may well agree to reduce the interest rate they’re charging on the debt. Depending on the individual’s circumstances, they may even agree to freeze interest for a period of time. This can have a huge impact on the borrower’s finances in the long term – the Debt Freedom Day figures show how much many people are spending on interest every year, so it’s easy to see how a reduction in the interest being charged can make a big difference.

Debt management – one way to take control of debt
Reducing monthly payments to an affordable level and reducing interest rates so the debt doesn’t grow so quickly (or at all), debt management can give the borrower a real chance to take control of their debt and start paying it off at a realistic rate.

However, it’s always worth talking to a debt adviser first, since debt management isn’t always the best approach. Sometimes, it won’t even be an option, as lenders won’t agree to new repayment terms unless a borrower genuinely can’t make the payments they’d originally agreed to. Plus, repaying any debt more slowly will obviously delay the day it’s paid off once and for all, and may increase the overall cost of the debt – unless the interest rate is reduced by enough, the total cost will be higher, as the debt will spend longer accruing interest.

Finally, there’s the question of credit rating. Whenever a lender issues a default notice because the borrower doesn’t keep up with repayments as originally agreed, this will stay on their credit rating for six years, which can affect the cost and availability of credit.

Types of Loans

There’s always something that we just have to acquire—whether it’s expensive jewelry, a lavish wedding, or antique furniture—but all too often, we don’t have the money for it. In turn, they rely on loans, and live from paycheck to paycheck. But having too many monetary obligations can kill a person’s finances, and leave them with nothing saved up for an emergency. In some cases, families are left with nothing.

But loans are not in itself a loathsome thing. In fact, a good credit history can improve your credit score. But what many couples do is to get into debt without really learning all about loans. That is the first part in sensible personal money management. And during this time, when we are all being hit hard by the sweeping financial crisis, we all need to be astute when it comes to handling money.

Here’s the lowdown on loans. Simply put, loans are an amount of cash that a lender grants in exchange for a part of the loan balance. The interest is paid in addition to the monthly payment, which in turn is a portion of the entire loan amount. Loans such as mortgages and car loans are considered secured loans, while bank overdrafts and personal loans are typical examples of unsecured loans.

One particular type of loan that some need to learn more about are bad credit loans. Normally, loans are given based on a person’s credit record, which can be either good or bad depending on their previous payment behavior. This is where bad credit loans are aimed at.

Some financial institutions offer bad credit loans, often at a higher rate of interest than regular loans. If you are one of these individuals with a bad credit score, and you are hoping to apply for more credit, then it would be best to shop around before choosing a bad credit loan. Before committing yourself, make sure that you read the fine print on the loan agreement and ask questions if you don’t understand certain clauses.

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Is Barefoot Running Beneficial?

Barefoot running is the current craze in the running community. The proponents argue for running barefoot rather than using running shoes. It is practiced by a very small minority of runners, but they are very vocal giving rise to the perception that it is a growing and bigger community than it really is. There are many very active barefoot bloggers on the web.

The advantages of barefoot running are not that clear. There will be less damage to things like the toe nails which can be damaged by poor fitting running shoes. Transitioning to barefoot running from the use of running shoes can be difficult and problems often develop. These problems are associated with skin blisters under the foot and muscle fatigue as the runners gets used to being barefoot. Barefoot runners make a lot of claims about how their muscles get stronger and that they get less injuries after they have transitioned to barefoot. However, there is no evidence that this is actually the case. Many runners who have tried to move to barefoot running had to revert back due to all the injuries that they were getting.
There is some research that has compared barefoot to shod running, but all that has shown is that they are different. The barefoot running community has interpreted a lot of this research to say that barefoot running is better, when it did not.

The disadvantages of barefoot running is penetrating injuries from objects on the ground. There may also be problems running barefoot in the extremes of heat and cold. As these runners tend to run more on the ball of the foot, there is greater risk of injury to the ball of the foot and the Achilles tendon.

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