Know you need to make changes
The first step in reducing your debt is to realize you are one of the
hundreds of thousands of Americans who simply cannot keep up with their monthly bills
and high interest credit card payments. Now that you are acknowledging you are
behind, or about to fall behind you can utilize these easy to use tools to get
rid of your debt worries now and avoid ever facing the ugly prospect of a
bankruptcy. These tools are going to involve some changes in how you manage
your money and where you spend it. They need not be life altering, but a few
simple changes can stop the financial bleeding today.
Know your financial enemy
In your battle to
financial freedom from debt, know who you are fighting and
what is hurting you the most. Take out all those
credit card bills and look at
the interest you are paying on them. High interest debt is bad debt, the worst
type you have and the kids of debt that will sink you into a
debt cycle that
will be hard to break down the line. The good news is you don't need to go down
that road. Eliminate those high interest credit cards now, starting with the
highest ones. Pay them off today in a lump sum. If this is just not doable,
transfer these balances to credit cards with less than 10% interest rates. Be
sure to
cut those cards up after you clear them and never use them again.
Make a debt management plan
You need to make a plan to deal with your remaining debt. Getting rid of those
high interest credit cards was the right move, but don't stop there. You need
to add up all your
bills, lines of credit and loans you are paying on each
month. Look at your income and compare the two. Set a budget that can meet your
financial obligations on time each month and don't miss payments. Look at your
expenses each month and start making cuts wherever you can. Just simply eating
in one more time a week can add up to hundreds of dollars a month
(or read about how it may be less expensive to eat out). Knowing what
you owe and what you spend compared to your income (your
debt/income ratio) is
your best tool in staying in front of a
personal financial crisis. Stick to
your new
debt management plan and reduce your debt yourself.
Seek financial help
If you still find yourself unable to keep up with your monthly obligations,
look for a
credit counseling company to help you right your finances. There are
several options available to consumers today to help you reduce your debt and
avoid bankruptcy. Get financial help and explore your options like debt
consolidation and debt settlement.
Related Articles:
Things to Look For In a Bill ConsolidatorKeep Your Vision of the Future Bright - Debt Settlement Will Help YouYou Can Become Debt Free With ConsolidatorsHow to reduce or eliminate your debtSample Letter for Mortgage Hardship, Loan Modification