EP137 How to Manage & Negotiate With Creditors (People You Owe Money)

During these unusual times, you may find that you are working more, less or not working at all. Because of this, your money situation may be at the forefront of your mind, and you are likely considering how you can save money and keep control of your budget. You may realize that you cannot afford to pay for everything that you are signed up for, so reducing expenses will be essential. You could, for example, consider lowering your auto insurance premiums because you are now working or studying from home. But, how do you go about negotiating with creditors about a reduction?

Today, I share a short, practical training on how to manage and negotiate with your creditors. I reveal the best way to approach the people you owe money to and how to structure your conversation. I share how contacting your creditors over the phone and the internet differs. I also highlight why it is vital to get any agreement in writing and check the implications to your credit score and overall cost of the debt.

“Being proactive and honest with creditors and trying to make a plan is being responsible.” – Tracey Bissett

This Week on Young Money:

• How to make a list of the people you owe money to
• Sorting your creditors into an order, starting with those that have the most significant impact on your cash flow
• Preparing your mindset and recognizing your motives before contacting creditors
• How to research and inform yourself about the options available, including contacting a professional and visiting creditor websites
• The online route versus the telephone route of speaking to the people you owe
• Why you shouldn’t stop your momentum after your first success
• Why you must check for any implications linked to your negotiations, including your credit score and total cost of borrowing

Three steps to managing and negotiating with creditors:

1. Make a list of all creditors (people you owe money)
2. Make the actual approach
3. Get it in writing and other details

Resources Mentioned:

• EP115: Shmoney Guide with Olga Kirshenbaum
• EP133 How to be Financially Fit During A Global Pandemic
• EP135 How to Evaluate Your Financial Situation and Plan for Cash Control

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