RENO, Nev. Whether it be from unemployment, medical bills, or reckless spending, recovering from a financial crisis is never easy.
At the Consumer Credit Counseling Service of Northern Nevada, manager Elizabeth Estes says most people the non-profit has helped lately are struggling to pay off debt from credit cards they were forced to live on when the recession hit.
"The biggest thing we're seeing, and this is in the past few years, is reduced income," Estes said.
The Consumer Credit Counseling Service of Northern Nevada offers free help for people struggling to get out of debt.
"We sit down with you and work out a budget, show you where you can cut back so you have enough money to pay these creditors."
Estes says far too often, people who come in for help are struggling to keep a balanced budget, but there is a way for people to pay back their debts, even if they are still living paycheck to paycheck.
It's called the Power Payment Plan and it all starts with cutting down your monthly budget. Even if you think you've cut down all you can, Estes says there's always ways to cut more.
"One of the first things you can cut back on is food," she said. "Reduce your food expense. You may say, 'Well I need that,' but there are places you can go to get staples until your finances are back on track."
Once the budget is cut, take the extra money and pay your bills in a very specific order.
"The goal is to pay the smallest creditor off first," Estes said.
Under this plan, you pay the minimum payment to the most expensive creditor.
"Then when you get to the lowest creditor, everything you have left over is pushed towards that creditor so they get paid off very quickly," Estes said. Once they're paid off, you still have the same amount of money but you have fewer creditors so you add the extra money to the next lowest creditor, than the next lowest creditor."
If you owe roughly the same amount to each creditor, Estes says do the same thing, only put the extra money towards the creditor with the highest interest rate.
Over the past few years, Estes says she's seen people from both ends of the wage spectrum seek their help.
"We have people who come see us who live on $900 per month and some who live on $10,000 per month."
While most of their services are free, Consumer Credit Counseling Services of Northern Nevada offers a paid service call the Debt Management Program for people struggling with overwhelming interest rates and debt.
"Basically we take over your debt and we work with your creditors to lower your interest rates," Estes said. "You pay us a lump sum and we distribute it to your creditors for you. For that service we charge a flat fee of $20 per month."
"My personal view point is there is always a way to get out of debt. All you have to do is ask for help."
To help you get started in the right direction, you can print out the attached monthly budget spreadsheet provided by the Consumer Credit Counseling Services of Northern Nevada.