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5 Tips for Defeating Debt
Conquering the mountain of debt created throughout your life can be a frightening and stressful endeavor. Student loans, mortgage payments, medical bills, credit card debt, and day to day expenses have a way of sneaking up on you fast. You have to go into the battle against your debt with a plan and muster up the guts to persevere when the going gets tough, as if the going wasn't already tough enough.
1. Get Organized
There are a million tools and methods out there dedicated to the task of organization. You need to find out what works for you and stick with it. When a bill comes in you need to open it and review it. Then you need to take action by either paying that bill or filing it in it's proper place. Don't just let those bills pile up. Out of sight, out of mind will not make your debt magically dissappear.
Organization can give you a feeling of empowerment and control which can go a long way towards reducing stress and eventually achieving your goal of being debt free.
2. Figure How Much Money You Owe and to Who
Now that you are in control and organized you can begin to calculate how much money you owe and to whom. It might help to create a spreadsheet with debt amounts, account numbers, creditor names, and contact information. Whatever information you need at hand to start calling creditors or to start looking at some helpful services in place for those in debt.
3. Get Some Help
For some it can be a very demeaning or degrading thing to admit that they need help. The truth is, when in debt, you need all the help you can get. There are books, blogs, radio shows, podcasts, and counselors that specialize in personal finance and debt management. Debt Consolidation Services and Counsellors can work miracles, but be very careful with who you choose by doing your research first.
As a general rule of thumb, look for a service that operates as a non-profit. These programs will make your life much easier, consolidate your bills into one payment, and stop those harassing phone calls from creditors. There are plenty of resources out there so use them to your advantage.
4. Work Out a Budget and Live By It
Here is a simple truth: It is much easier to spend money than it is to save money. That is why you need to design a budget and live by it as if were gospel. It's easy to estimate and budget monthly what goes towards basic goods and services like, rent, mortgage, utilities, etc. However, it's the little things that we purchase from day to day, usually luxury items like a coveted latte, that add up and take their toll on your wallet. If something is not in your budget don't buy it. Over time that money can be used to pay off a credit card or another pesky bill.
5. Stick To Your Plan of Becoming Debt Free
Being in debt can be a dark lonely place but don't fret. You are not the first or only person to have financial difficulties. According to Kim Khan:
About 43% of American families spend more than they earn each year.
Average households carry some $8,000 in credit card debt.
Those are staggering and depressing numbers. Hopefully they are motivating as well.
So why are you still reading this? Get to work on reducing your debt and and eventually achieving the noble goal of being debt free.
Posted on March 18, 2008
