Yes, it sounds hideous, but if paying your bills is starting to become a problem, it may be time to let your creditors know what’s up. By not waiting until things get really bad, you not only show responsibility, but could ultimately help lessen the financial burden you carry.

I’m not going to lie, though. As conversations go, it won’t exactly be a walk in the park. Things to keep in mind:

You’re talking to a human being. Yes, they may be in an offshore call center, or reading from a script. But they aren’t there to judge you. More likely than not, they will have a sympathetic ear.

You’re not alone. Your story is not going to shock anyone. They’ve heard it all. There are many people in similar circumstances right now.

Settle up. Some issuers MAY be willing to settle a large balance with a fixed amount, so you stop getting charged interest indefinitely. However, this is at their discretion and more likely to occur if your account is not past due.

Settle down. If you don’t end up hearing any promising news from the other end of the phone, STAY COOL. Getting upset won’t help your situation.  Besides, that’s what your kick boxing class is for.

Good luck.

If you have any tips or stories to share about talking to creditors, we’d love to hear them.

Debt seems to have a lot of people down nowadays.  While overindulgence in debt may have caused some major issues in the past (and present), having some debt can have a plus side.  No, debt is not always the evil minion it’s made out to be.  Incurring some debt and using it wisely can help a person build his or her credit score, thus enabling that person to secure loans at lower rates.

However, debt must be managed carefully.  Spending willy-nilly and swiping plastic likes its going out of style has placed the American consumer in a bit of a pickle.  That’s why the responsible use of debt is paramount for keeping your head above water. 

How can you know if you have a problem using credit too much?  Obviously, there are many people know feeling the effects of debt management.  But, if you can sense that you may be heading toward trouble before you get swept under, you can save your credit (not to mention a lot of money).

There are a few tell-tale signs that your credit load may be becoming worrisome (other than having 2 dozen credit cards).  One of the very first signs that you’re overspending is not being able to make the minimum payments on your credit cards.  There may be times when you can’t pay off a debt in full (car loans, mortgages, student debt), but credit cards are another story.  Given the high percentage many credit cards charge on outstanding debt, it’s often best to pay off as much as possible as soon as possible.

If you aren’t able to make minimum payments, you’re also probably being charged late fees.  These fees are surely not helping you pay off your debt any faster, so it’s best to try and avoid the situation altogether.  Another signal that you could be taking on too much debt is if you’re using debt from one credit card to help pay off the debt on another card. 

If you’re beginning to suffer from these problems, you can search some of the other blog posts at What’s My Score, or if things are looking really glum, seek out professional help from a debt counselor.  It’s okay to seek help early or look for advice on your debt matters.  Given much of what is happening with the economy today, it’s clear that catching the problem early can have some major advantages.     

Thank you IRS.  Okay, maybe thanking the IRS is a little bit extreme unless I’m receiving an unlimited refund.  However, the IRS has opened a way for many taxpayers, especially younger taxpayers, to save money. 

Now I know that filing your taxes can be quite the hassle.  Filing 1040s and 1099s while reviewing W-2s, etc. can give the novice tax-filer can definitely cause headaches.  In order to lessen the burden, many taxpayers turn to tax professionals or software programs to help with filing the year’s tax return.  Unfortunately, software costs money and paying an accountant usually costs a bit more than software.  Dropping a hundred dollars for tax help might feel unreasonable, especially if you only made a grand or so during a summer job.

This year, there may be some respite.  The IRS Free File program allows many people who have earned less than 56k in the past year to use online programs to file their taxes for FREE.  Yes, I said it, there is something free from the IRS. 

With IRS Free File, you are able to choose for a large list of online tax preparation programs.  While some of the online programs have provisions for usage on top of the earning less than 56 grand stipulation, the IRS even provides help in finding online companies whose regulations meet your situation.  That is just amazing. 

These free online tax filing programs make filling out tax forms very simple (or about as simple as possible).  Even noobs can usually take care of their own taxes with the help of some software.  The programs ask simple questions and do the math for you, relieving you from shuffling through confusing forms while performing mathematical equations.  Wait, did I mention you’ll save money cause the programs are FREE? 

If you’re interested in trying the IRS Free File out (and I recommend at least taking a look), go to www.irs.gov.  Once there, check the left hand column and click on Free File, under Online Services.  Or if you just want to get straight to the point, click here.

It’s not every day (or decade for that matter) that the IRS spreads the love.  Granted, this gift isn’t entirely the IRS’s doing (The IRS is partnered with the Free File Alliance LLC.), but I’m not complaining.  Maybe next time I’ll even throw some compliments the way of the IRS if doing so will enhance my return of course.

Nowadays, everyone has homeboys.  I’ve seen more than my fair share of people flaunting t-shirts stating, “Jesus is my Homeboy” or “Obama is my Homeboy.”  I even once saw “Dennis Kucinich is my Homeboy” t-shirt.  Well, that’s all fine and dandy for the people who enjoy flaunting members of their imaginary posse on their chests, but we need some real G’s to help us out at the moment.  In case you didn’t know, I have John Maynard Keynes rollin’ in my posse.  Unfortunately, he died more than 60 years ago.

Nonetheless, Keynes has become increasingly relevant as the economy declines.  Surely all of you are familiar with the Paradox of Saving.  No?  Well you’re in for a treat.  This paradox actually assumes that there are reasons spending money is good!  How’s that for a pick me up during a recession?

The Paradox of Saving, posed by Keynes, states that during a recession, if everyone tries saving more money, then there is not enough buying going on to spur economic growth.  If the economy doesn’t grow, then neither does the amount of money people have, causing people to be able to save less money. 

So we have to spend money in order to save the economy?  Yes.  However, spending money that you can’t afford to spend is somewhat frowned upon (Remember that recession thing?  Oh yea, we’re still in it.).  Instead of spending mass quantities of money hoping to do your part in the war against a depression, you can work on spending money on things that will save you cash in the long run while also squirreling away a little bit of dough.  For example, a new air filter can increase your gas mileage and new light bulbs can cut back your energy costs.  See?  Spending money can save you money.  Unfortunately, a new Mercedes is unlikely to prop up your bank account.

If your bank account is suffering, maybe it is time check your posse and see who your homeboys are.  If you and your crew have a combined income of less than 20k and play a weekly poker game with a 40 grand pot limit, you may want to try adding a financial adviser to your crew.  Oh, and also, if you’re still wearing a “Bernie Madoff is my Homeboy” t-shirt, you might want to change.