Part of Our Healthy Finance
Techniques to Reduce Debt
debt can be a mind boggling experience. When all you see is your dwindling bank
account - with no end in sight, how do you go about clearing a path to debt reduction?
a little knowledge and a concerted effort, anyone can begin creating a budget
to reduce their overall debt.
and foremost, stop adding debt upon debt.
this sounds simple, but it's of paramount importance that you quit accruing debt
and that you quit it right now.
cash for your purchases, not your credit cards.
pre-approved credit catalogs when they pop up in your mail.
bottom line is; if you can't pay cash, you don't buy it. Period.
figure out how much you pay per month total for all of your expenses. This includes
rent/mortgage, car payments, car/home insurance, utilities, credit card debt,
other personal loan debt, food, gas, Internet, cable television, clothes, eating
out, and entertainment - literally everything.
determine your total income. Subtract this total from your monthly income total.
How does it look? Are you comfortably in the positive or barely? Or are you in
you're barely in the positive, or if you're in the negative, it's time to reduce
your overall expenses.
are you willing to get rid of? Be ruthless and red line extraneous expenses out
of the picture. You can also shop around for better telephone rates, cell phone
rates, and insurance rates. Make changes where you can.
your credit card companies and try to get your interest rates reduced; sometimes
they're even willing to negate past due and over the limit fees. Your goal here
is to reduce your overall debt from your credit lenders.
see if you can refinance your home for a lower interest rate.
relentless in searching for better deals.
highest interest rate debt first, over the minimum if you can, by
as much as you can. When that one is paid off, do the same with your
next highest interest rate debt. This is called Accelerated Debt Payoff,
and it works extraordinarily well in reducing debt fast.
your paycheck isn't already automatically deposited into your bank account, set
that up. You're less likely to take cash out if you're not going to the bank to
deposit it yourself. Set up a maximum of how much you can withdraw per pay period
- and stick to it.
you have to make a purchase; take the time and search for sales and discounts.
Check Internet auction sites and your local paper for gently used items to save
even bigger bucks. Be a smart shopper and look for the best quality for the lowest
amount out of your pocket.
necessary, find ways to increase your income. Work a few extra hours at work;
get a second job; capitalize on a skill you have (such as baking, automotive repair,
computer technology) in your community, or even have a garage sale.
the decision now to adhere to a budget that includes some, or all, of the above
techniques and you will succeed in reducing your debt to a more manageable level.
The next step? Eliminating it completely so you can have a solid financial platform
to build your life upon.
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