Be Debt Free – You can make it if you follow these 7 tips.
Debt affects millions of people today. Bankruptcy’s are on the rise and more and more people are struggling to stay afloat.
The effects of bankruptcy can be far reaching and can impact people’s lives long after the bankruptcy has actually ended, making it difficult to obtain credit and even spoiling many employment opportunities when companies credit check potential employees.
For some, it may be their only option but for many, there may still remain a chance if they take action.
Consumers in general now carry a huge amount of revolving debt on credit cards and 47% of people who don’t pay off the full balance each month pay only the minimum balance, a terrible strategy for paying off your credit cards and a very expensive one.
It seems to be almost the norm in our culture to think that we are owed something and that we should be able to get the things that we want as soon as we want it. The banks and credit card companies have spent allot of money trying to convince us of this. That way, they can keep us owing them money and working for them forever!
All is not lost though, for most people, if you take action now, you can probably still fix the problem and start living a debt free life!
Tip 1. Write down all of your debts. It sounds simple, but you’d be amazed at the difference that this one simple step can make. Make a list of all of your debts, list the amount, who it is owed to and the monthly repayments. This can be hard as it is difficult to face up to this problem, especially if you have been hiding from it for some time. It is the most important step though so get started now.
Tip 2. Work out which debts to focus on. One good strategy is to only pay the minimum payments on all of your debts except one which you deem to be the most pressing. (Normally the one with the highest interest but it could also be pressing for other reasons.) You pay as much as you can to that one until it is paid off then you add the payments for that one to the next most pressing debt. This can significantly shorten the amount of time it takes to get out of debt.
Tip 3. Cut up those credit cards! Don’t just put your credit cards away somewhere and defiantly not in your wallet. Cut them up so that you won’t be tempted to use them. When you pay each one off, contact the company and cancel the account. Don’t fall back into the same trap!
Tip 4. Examine your credit report. Your credit report shows you your payment history. You can get a copy cheaply from many places online. You should check it for any errors that could harm your credit rating and write to the companies concerned to have them corrected. This will ensure that your credit problems do not cause you trouble into the future.
Tip 5. Make a budget and stick to it. A budget can be the single most important step that you can take to not only get out of debt but also to ensure that you start to prosper financially, no matter where you are now. It is actually pretty easy to do. You can find easy, free instructions on my website on putting your budget together.
Tip 6. Never swap unsecured debt for secured debt. Companies will throw offers at you once they learn that you are in debt trouble and you are a home owner, but they will reposes your home at the first opportunity if you start missing payments so don’t do this unless you have no other option and always seek impartial advice first.
Tip 7. Help is available, take advantage of it. Don’t face this problem alone. There are debt charities and non-profit organizations that can offer you advice and an understanding ear so before you take any drastic action or sign up for anything drastic, take the time to hear what they have to say. You may be surprised.
Filed under: Management