9 Proven Debt Elimination Tips
Some people go from one source of advice on their debt problems as if they'll get a different answer or the answer they want to hear. They'll go for debt counseling, read books or seek out debt elimination programs as if magically their debt will just vanish. But that's not how it works. You got yourself into debt, you have to get out.
Tips and advice for your debt problems
1. Figure out how much you owe.
Gather up your bills, have a pen with some paper, and begin to write down everything. Your credit report can also help you. Write down everything you are sending your money to, to figure out how much you owe. List them in order by interest rate, highest to lowest. Before you can do anything about your debt you have to know how much you have and who your sending it to.
2. Get rid of credit cards.
If you have one card that is not maxed out transfer all of your other credit card debts to one card, preferably with a lower interest rate. Then do away with all of your credit cards altogether, cancel them. You will never need them again, unless you plan on being a debt slave for the rest of your life.
3. Create a budget.
Most people don't seem to like budgets. I guess it's because then they don't like seeing just how much they are spending and why they are in debt. They don't like the truth. So, before you say a budget won't work for you, stop. You (, everyone,) need a budget to keep your finances organized. Create a list of all of your monthly expenses, including all minimum monthly payments on your debts. Don't forget to list at the top all of your incomes. Also, add a category called emergency fund where you will be putting at least $5 or $10 out of each paycheck for real emergencies, like the car suddenly breaks down.
4. Set up a payment plan.
Set up a plan that shows exactly how you will pay off each debt. Begin with paying off your debt that has the largest interest rate, then the second largest and so on. Pay your minimum monthly payments on your other debts and put as much as you can to the first one on the list. If you ever have a little extra money coming in, it goes toward paying off the debt at the top of your list.
5. Set realistic goals.
Set goals or bench marks to gauge your progress as you eliminate your debts. Plan to have credit cards paid off within a certain number of months and stick to it. You will feel energized and motivated as you reach your goals. Put your car loan right below your credit cards and make sure it too is paid off in full.
6. Find ways to save.
Look for sales, buy at discount, clip coupons, set your programmable thermostat lower, replace light bulbs with CFL (compact florecent lightbulbs), drive less-walk more and so on. Continue to find ways you can save money to get rid of your debt problems even sooner. Doing something as simple as making tea at home instead of buying cans of pop can save you a good deal of money each month. Don't forget to bring you lunch, at least three times a week.
7. Cut back on extras.
You have to do without cable TV, getting your nails or hair done as often, or buying several cups of coffee each day. Bottled water is a huge expense which can be replaced with a refillable bottle that you carry with you. Doing without extras for a while is well worth it. A temporary inconvenience will turn into a new lifestyle of less waste.
8. Try to negotiate your debt.
Many debt collectors will negotiate a smaller payoff amount in order to resolve the debt. It is well worth a try. Tip, try debt negotiation toward the end of the month as many agents are paid on commission monthly and that may be an incentive, a few quick resolutions will boost their commission.
9. Consider debt consolidation.
I wouldn't try this right away, because you could end up owing more, with fees and interest rates. For some people it can be a life saver while for others it could be a really bad idea. Debt consolidation involves taking out a loan to pay off all of your bills at once, leaving you with just one monthly debt payment. If you qulify for debt consolidation, look around for the best interest rate and get terms that you can handle. You don't want a monthly payment that is larger than if you paid the bills yourself.
Nine tips, not so hard. It's just a matter of what you really want: be debt free for the rest of your life or a debt slave. Which is it? If you really truly want to be debt free, then keep reading, there's more help.
Articles:
- title 1
- title 2
- title 3
- Wealth Defined
- Not a definition many people would consider.
- Table of Contents
- A Sitemap for all of the Debt related articles.
