take to pay off your debt,” she says. A reputable nonprofit will charge you a small counseling fee, usually less than $50.
The NFCC, the nation’s largest national nonprofit credit counseling network, has more than 1,000 community-based agencies. To contact NFCC, call 1-800-388-2227 or log on to www.nfcc.org. If you plan to find a credible agency on your own, remember to ask the agency if it’s a nonprofit, if it’s licensed in your state, and if it’s listed with the Better Business Bureau. Also, ask the agency representative about up-front costs — if they’re more than $50, a red flag should go up. And, ask them if they keep your first month’s debt payment and use it toward “fees.” If they say yes, you’ll know that the organization may not be legit. Broussard also cautions consumers to be wary of debt settlement companies. “This goes on your credit report as a charge-off,” she says, which can negatively affect your credit.
You can also work directly with your creditors. Pulley wrote letters outlining what she could pay, paid her bills on time, and used any extra money she received to pay off her debt. And she was able to do it by working only one job. It took her five years, but today she is free of the debt she created in her 20s and was recently preapproved for a $200,000 mortgage based on her salary and mid-600s credit score.
You may also want to do some personal therapy to figure out why you got into debt, says Stephens. “We don’t have a history of wealth building,” says Fairley. “Our participation in the economic arena only dates back to the third or fourth generation in many families. We’re just learning that debt is a hole. While it’s not our fault, it is our problem.”
Support groups like Debtors Anonymous (www.debtorsanonymous.org) will supply you with the tools you need to stop creating debt. And Websites like cheapskatemonthly.com, Lawrence’s moneytracker.com (www.moneytracker.com), Stephens’ Website (www.brookestephens.com) and blackenterprise.com provide users with a sense of community and offer in
valuable information.
Unless you begin planning for Christmas 2005 now, you may end up in the same situation next year. Lawrence advises creating a plan for 2005 and budgeting for unexpected holiday expenses, such as shipping, wrapping paper, trees, decorations, holiday entertaining, and travel.
Marty and Dana Capers of Bedford Heights, Ohio, start thinking about Christmas shopping in November. They budget about $1,100 for the holiday and pay for gifts with cash or their American Express card, which they pay off the following month. “I do a spreadsheet of all the people I have to buy for and I assign a dollar amount,” says Dana, 36. They begin setting money aside in October and do so by paying the minimum on credit cards for October, November, and December and by foregoing restaurant meals and entertainment. If they find they’re reaching their budget limit, they will nix holiday get-togethers or deduct the money from their January budget.
Open a Christmas Club account. “To get an idea