Debt Reduction - Two Important Tips to Get You Back on Track Financially
Debt cripples your financial future, it robs you of your freedom and it is a dream destroyer! OK, there is no instant way to eliminate your debt short of winning the lottery but, don’t despair.
1. Bite the bullet. If you carry high levels of debt and are still doing the things a debt free person is doing then it’s time to get real. You won’t want to do these things because you feel you need to have some rewards, but. . . Ask yourself what do you want in the long run? Do you want to keep feeling like this?
You may have to give up the gym membership or regular classes you take.
Start taking your lunch to work, stop buying coffee.
Car pool to save gas or use public transport, plan your trips to reduce the number of times you have to take your car out.
Have a garage sale, or even better sell your excess stuff on Ebay, if you are smart you will make much better money for stuff on eBay than in a garage sale.
Stop buying junk food, it’s actually cheaper to eat well, the top selling products in supermarkets are cola drinks and cookies. You will also feel much healthier.
You must use these savings and cash from selling stuff to pay down your credit cards.
2. Pay off credit card debt. There are two ways to approach this. You have to meet the minimum requirement on each card monthly OK.
With the savings etc, pay extra on the card you owe the less on each month,until that card is clear. e. g you have 4 cards you owe 5,000, 4,000, 3,000 & 1,000. Once the 1,000 is paid off the add that payment to the 2,000 repayment and pay it down. Continue until that card is paid off then move your total repayment to the 4,000 and so on.
Another way is to choose the card with the highest interest rate and pay it off first. Psychologically the first method is better as you may get the reward of paying off a card faster. If you lowest value card has the highest rate then it’s a bonus.
This system only works if you keep to your savings plan and you stop buying stuff on your cards!
Again ask yourself what do you want, and do you want to feel bad from your debt or do you want the satisfaction of freeing up your debt, Financial freedom begins with taking steps to reduce debt and therefore freeing yourself mentally and emotionally.
For specific Debt Reduction assistance go to
http://www.livingwellpublications.com/self-improvement/debtconsolidation/
Ian Newton is a stress management specialist from Australia. Assisting businesses and individual to be happier and more effective.