A) Are acceptable to all your creditors.
B) Leave you enough money to handle your living expenses.
C) Generally get you out of debt in two to five years.

Such plans include: an alternative to bankruptcy, debt consolidation, or an interest-rate-reduction plan. All these descriptions have been attributed to debt-management plans. In fact, debt management plans offer all these benefits - and perhaps a lot more. Here’s how: When creditors realize that you can’t meet the original terms of your credit cards or other loan agreements, they also realize that they’re better off working with you through your credit counselor. Under a debt-management plan, your creditors are likely to be open to a number of solutions that will be to your advantage. These include:

A) Stretching out your payments so that the combination of principal (the amount you originally borrowed) and interest will pay off your balance in 60 months or less.
B) Changing your monthly payments to an amount you can afford to pay.
C) Reducing your interest rate and/or any fees associated with your loan.
D) Stopping creditors from hounding you day and night.

Why would creditors be willing to do all these things for you? Because if they don’t do some or all of them, and if you really can’t make the payments, you’ll file bankruptcy - and your creditors will never get their money.

The critical point here is that the creditor has to believe that you can’t make the payments as agreed. But how does the creditor believe that without staking out your house or apartment to verify that you aren’t drinking Champagne and driving a new Corvette? The creditor generally takes the word of the non-profit credit-counseling agency you’ve gone to for help.

Sounds like a good deal: lower interest rates, smaller payments, and all. Well, the debt-management plan isn’t a free lunch. The minuses may include the following:

A) A possible negative impact on your credit report (although just being in a debt-management plan does not affect your FICO score)
B) An increase in interest rates (unless you pay in full and through the credit-counseling agency you originally signed up with)
C) Restricted access to credit during the term of the plan
D) Difficulty in changing credit-counseling agencies after you begin a debt-management plan

The bottom line is this: If you’re in debt crisis or you’re concerned you may be getting close to it, a debt-management plan from a good credit-counseling agency may be just the solution. If you’re just shopping for an interest-rate reduction or a consolidation-loan alternative, a debt management plan may not be in your best interest.

The most common misconception that most people have about the wealthy is that they always drive around in fast and fancy cars, take lavish vacations, and live on large estates. While that may be true of some people, but the majority of the wealthy live normal lives and go to normal jobs. The reason? They realize that uncontrolled spending can lead to uncontrollable credit and unfortunately as has been the trend, bankruptcy. There are several points that one could use to compare their wealth plan with their actions to see if they are truly heading in the right financial direction.

Do You Save? Sure everyone tries to save a little here and there, but to truly become a financial success a regular savings plan that is part of a well-balance budget. Saving money isn’t always easy. The advice of a financial advisor or even the use of money management software can help you plot a financial route. Planning for emergencies, educations and even mundane expenses should be part of a budget.

Certainly there are people who have stumbled upon their fortunes either by inheriting it hitting it big in the stock markets. That is a very rare occurrence and those who frivolously invest in every scheme imaginable to strike it rich usually just end up the complete opposite. Again proper money management is key.

Planning to save means that you determine now where you want to be and then follow in a patter of saving and investing that makes it possible to meet that goal. Of course a balanced portfolio utilizes more then just a savings plan. Investing in mutual funds and stocks should really carry and equal share of the load. Good money management also means controlled spending. A perfect example is that of an NFL player.

It is hard to believe that people who make enough in a couple of years for most of us to retire on would have any kind of money problems, but year after year players get themselves into financial binds and end up in the red. The reason is poor spending habits. Spending money on anything from a sports car and matching house for mom to an expensive dog house, they forget how important it is to save thinking they will always have enough. That is almost never the case. For these stars they should be saving more then they are spending in a year to be prepared for premature retirement or other emergencies. Only by controlling spending habits and developing solid money management skills can a person, star or not, ensure that they will be financially secure for the future.