Debt Relief Strategies

As Police and Law Enforcement officers, you work hard for your money and deserve every dollar you make. The challenge is keeping more of what you make while not running out of money at the end of the month.

The challenge is that life is so unpredictable and filled with unforeseen situations that can create a tremendous amount of financial stress unless you take the right precautions.

Here are 10-Basic Debt Relief Strategies for Police and Law Enforcement Officers that can help you avoid the financial pitfalls common with many LEO’s today:

1. Avoid impulse spending: This is a big one. Avoid eBay or trips to Home Depot when you’re bored. Look straight ahead while standing in the checkout line. In other words, don’t buy something you were not all ready shopping for. If you didn’t need it before, you don’t need now.
   
   
2. Don’t use a credit card unless you have the cash to pay it off by the end of the month: Avoid thinking you can pay-off that Flat-Screen with the next over-time check. “OT” is just too unpredictable. Use credit cards for emergencies. Consider an AMEX card, one that requires you to pay it off each month. When making payments on revolving credit cards avoid just making the minimum payment, if at possible, double your payments or at the very least, make a payment and half each month. This way you will pay down the balance faster and pay less interest in the long run.
   
   
3. Tear up credit card offers you receive in the mail: Do you know why credit card companies are always offering those 0% interest credit cards? Because most folks forget to pay off their balance within the given timeframe and end paying huge amounts of retro-active interest to the credit card company. This is true with other “Buy-Now-Pay-Later” offers through department stores. Walk away when you’re tempted at BestBuy!
   
   
4. Set up a budget and stick to it: Believe it or not, everyone has a budget whether they know or not. Each month, money comes in and money goes out. The problem is, more times than not, is more money goes out then comes each month. Create a realistic budget and stick to it. Don’t bet on the “come”, all too often the “come”doesn’t come and we get on the credit roller-coaster.
   
   
5. Live within your means: Put simply, don’t buy what you can’t afford, don’t abuse credit and avoid the traps mentioned above.
   
   
6. Don’t buy more house than you can comfortably afford: I guess we’ve all learned our lesson with this one.
   
   
7. Don’t make speculative or high-risk investments: If you don’t understand it, don’t invest in it. If the investment does not have a history of success, walk away. If it sounds too good to be true it’s probably not true.
   
   
8. Don’t incur joint debt with others who have questionable financial habits: If you sign on any “bottom-line” with another person, you’re on the hook if the other person defaults. We all have folks in our lives that we want to help out from time to time but the truth is, no one knows the future. Another risk we incur is when we co-sign for auto loans. Usually this means your name appears on the vehicle registration as well, placing you co-liable for any accidents where the driver of the vehicle is found at fault…this could be a big disaster in many ways.
   
   
9. Don’t build your budget around overtime income: With many departments cutting back on “OT” many officers are finding themselves trying to jockey their finances to make ends meet. This is a common yet avoidable situation. Do not use OT to pay for revolving debt or make such purchases based on OT income. As we all have learned OT comes and goes so don’t rely on it.
   
   
10. Make sure you are adequately covered by Life Insurance: If you have loved ones at home who rely on your income make certain you have adequate Life Insurance protection. Most departments offer only basic survivor benefits for an Off-Duty End-of-Watch. Make certain you know the details of the plan being offered by your department. Your goal should be to have enough Life Insurance to where your survivor can live off the earnings of the invested death benefit. In other words, a $1,000,000 death benefit invested at 7% would produce $70,000 of investment income to your loved ones.

The key to success is maintaining a high degree of discipline and persistence. These steps must become a part of your everyday lifestyle. It’s very easy to fall back into the “credit/debt trap”, it sneaks up on you slowly. Avoid compromise at all costs. It will hurt for the first few months but once you get used to it, you will begin enjoying the benefits of a debt free life.

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