More Debt Help Tips

Don't Pay Someone Else Thousands, Do It Yourself!

There is always a way to get out of debt, especially if you organize your money and know how  and when to pay.

If you follow the steps below, you can help yourself by 90% to become debt free.

1- KNOW what you owe.

You must know and identify clearly what you owe; the best way is to create a debt list with details for example:  

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And identify which payment has the highest rate thus allocate the highest priority to it.

2. Avoid creating new Debts. When you are already in debt, do NOT create new debt. Try your best to create savings strategies for the expenses that you do not pay monthly, for example some bills are paid quarterly. Even though, this bill is paid quarterly, keep aside the amount aside each month.

3. Decrease your expenses by developing a clear strategy and if at all possible, try to increase your income.

4. Do not always use your credit card.

5. Always create a list of items you plan to purchase and know the amount you are planning to spend. 

6. As soon as you develop a plan with your monthly income and expenses, you can set the amount for paying your debts. Remember, as we discussed previously, adding an extra amount to your monthly debt payment can decrease the interest payment and save time. When you have money with you, and you really do not need them as an advice add this amount to your monthly payments.

7. Being debt free is not only a way to manage your money, but also gives you an upper hand for future  negotiations. Try to find  alternative credit sources with a lower interest rate. Use negotiations, pretend to your current creditor that you’ve got lower rates with another one; this might help reducing rates to keep you as a customer.

8. Think before you buy! Sometimes you buy  an item and later on identify that you do not really need it at the moment. Think well before planning to buy. Ask yourself “do I really need this item?”

9. As mentioned earlier, we have good and bad debt, stay away from bad debt.

- High interest credit cards

- High interest items

- Big mortgage

10. Do not buy a brand new car when you cannot afford to pay for it. As an advice get a used one and keep it for many years.

11. Be smart and reasonable.

Those are some steps toward being debt free. Getting out of debt is challenging but it can be done, especially with dedication and perseverance.

When you are asked to decrease your expenses, cancel your credit cards, develop a plan, etc… you are changing the way you live, and especially the way you think. Following the steps mentioned above will give you an edge, but  you must change the way you think.

Saving one dollar every day or any  small amount of money can be useful, whether it be extra cash for a rainy day or to help reduce your debt.

Always pay off the smallest bills  first, this way you will save some money and add it to the highest bill. This work in most cases when you have for example 5 bills. You pay the small then allocate an extra payment from the saved amount into the higher bill.

Keep your credit card for emergencies, do not carry the card with you, and have cash in your pocket whenever possible. Get out of financial difficulty and leave your credit card at home.  

Take this into consideration; the credit card business is very competitive. When you always make your payments on time, call and ask to lower your interest rate. 

Nowadays, everyone carries a mobile phone or a PDA (Personal digital assistant) or a pocket pc. Carry them with you all the time, and record your purchases whether by writing a note or downloading a free or paid financial management software, it wont cost you more then 30 bucks. If you are only using notes, write down the amount and what it was for. That way you can really see how much you are frittering away each month. This is the best way, to keep records of your financial spending.

So it would be better to carry your PDA or small notebook rather then your credit card(s). When you need to buy something take a look at your notes, and see your total debt or purchases and the budget that you can really work with. You do not really need to buy an item or whatever product unless you really cannot live without it. In most cases, you spend money for something with less priority where you could save this money for something with a higher priority or use it to pay existing debts.

Always make a monthly budget for yourself, if possible do it weekly or even daily; being financially organized is the key to success. You must include details in your budget. Add foods, bills, entertainment, transportation, shopping, miscellaneous and other and this way you will see how much you really need to spend and which is higher in priority… If you can make changes to your way of life and save some money, do so. Use that money to pay back debts and in the meantime you should stop adding to your borrowing by surviving only on cash or debit cards.

Are you a student? An employee? Get into the habit of bringing what you need from home. Bring everything with you to school/university or to work. While your savings may only seem a  small amount,  you are still SAVING. And it is not the amount that matters, it is replacing old habits with new ones - saving instead of spending.

For example, a small saving of 3 dollars per day by, say, making your own lunch does not sound like much, but over a period, this adds up to a saving of ninety dollars.  That's not chicken feed!

Look at your monthly income based on the net amount. Deduct taxes, health plans, social security etc… and you will have the net income.

Live within your means. If you can't afford to pay cash, you can't afford to have it. Pay off highest interest debts first.

Usually, when you have less free time, you spend less money on nights out or shopping. When you are in debt, do not go out for shopping or for entertainment until you are sure that you are managing your finances. 

 If you cannot keep up, you could embark on a debt consolidation program. Do not ever work with private firms or lawyers with these issues. There are plenty of non-profit agencies who are ready and willing to help you anytime with plans for improving your financial situation.

Like most of us, disclosing this confidential type of information to a third party agency is not something that you would really want, but if they can  help you get out of trouble, avoid bankruptcy and give you a debt-free date to look forward to, its probably more than worth it.

If you're a real shopaholic, go to the thrift stores. They are often run by charities and often don't take credit cards, so you have to pay cash. It's a real high to find the things you need and still stay out of debt.

Be honest with yourself, in this way you put yourself on the road to financial freedom. You will need to really assess all the debts. Look at all your statements. Cut up and cancel all the cards and accounts, except the one with the highest remaining credit available.

To get rid of the debt stress, you will have to give up many things you consider needs. You can live without new clothes for awhile, without buying the latest smart phone, the cable TV, the higher bandwidth internet connection, and much more, believe it or not. You have to face the responsibility and the consequences.

Luxury items and things you want will be more valuable to you, when you really can afford them with cash up front, or using credit in a wise way.

If you are an employee, be willing to work overtime, get a part-time home job or something similar, there are plenty of websites that offer home job opportunities. Do not be fooled with brand names, an xyz mouse for your computer will work just the same as a xyz2 mouse. It is a mouse! Why do you need to spend double the price for a brand name!

If you can buy directly from the factory do it, stores are buying from resellers and resellers from the factory so the fees are double or triple sometimes.

When your debts are high and your monthly income is not enough to cover the payments, there are ways to solve your debt problem. But the road to financial recovery takes a total commitment. You must decide you want to be debt-free. You have to discipline yourself to take the necessary action to pay back your debts. Only you can determine if you are willing to make the necessary sacrifices to achieve this goal.

Finally, it is inadvisable to take out new loans to pay off old ones. So-called consolidation loans are often offered at very high interest rates, quite often all they do is saddle people with new debts they can ill afford.

Don't Pay Someone Else Thousands, Do It Yourself!