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Debt, Debt, Debt…. How did we get into this situation, to become a Nation of Debts? Over the past decades, millions of Americans found themselves saddled with debt and sadly this trend will continue for generations to come.
Debt elimination has become more challenging because creditors know that more money can be made by driving people into debt and charging higher interest rates and many fees. Creditors are happy to snowball debts and see that debtors owe money for life.
Ask yourself do you want to work like a dog just to provide a source of regular income to creditors? If not, get serious about getting out of debt.
To be sure, there are many people who claim to help you get out of debt (debt consolidation or debt settlement companies), but they don’t want to see that happen. The harsh fact as a borrower is that no one is looking out for your interests and the best way is to help yourself.
Achieving debt elimination is not easy and it can take a long time to resolve all debts. Achieving financial freedom requires learning and applying the basic steps needed to get out of debt.
monitor your expenses
Where did all the money go? Well, the simple answer is to run after money. Monitoring your expenses goes a long way toward debt elimination because it shows you where your money is being spent. You can shave hundreds of dollars off your household budget by eliminating unnecessary purchases.
reduce unnecessary expenses
The next step in your debt elimination plan is to reduce your spending each month by a significant amount. Eliminating extra expenses like buying Starbucks coffee, branded apparel, glamorous car, fine food can save you thousands of dollars every year.
In addition to luxurious items like these, many people spend money on items they don’t really need, either because of convenience or to keep up with the jones in their pursuit of the latest and most stylish gadgets on the market. .
To achieve debt elimination, you must save more of your money and put it toward debt repayment.
cut up extra credit cards
Grab a scissor and do yourself a favor. Cut off all extra credit cards, save for the one you use most often and the one with the lowest interest rate. You will never pay off your credit card debts if you keep piling up fees every month.
If you have an outstanding balance, the final cost of paying for the item with a credit card can be much higher due to finance charges, interest and any additional charges levied on the account by the credit card issuer.
If you can’t pay for a purchase in cash, you should wait until you’ve saved enough money to pay for the item without using credit. Instant gratification has set many on a path of financial ruin.
Be disciplined about loan repayment
Let’s say you have done the above but after a few months, the urge to spend lavishly returns. impulse buying Your debt elimination plan has been derailed and you are back to where you were before.
It’s a colossal waste of effort. Remember that eliminating debt involves discipline. You should prioritize the repayment of your loans. Any “extra” money after expenses should be used to pay down your debt.
If you stick to this regiment, you will see the fruits of your labor. If you aggressively reduce your expenses, your debts will go down and disappear faster.
Start a savings account for emergency needs
While you’re paying off your debt, don’t neglect to open a savings account for emergency needs. One of the main reasons people get into debt is because of an unexpected expense. To take care of this issue they will have to take a payday loan or charge the amount to their credit card.
There will be unexpected expenses like roof leak, car repair, and having extra cash available will keep you from getting into debt.
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