Eliminate Your Debt - Live Longer? At Least Better
Getting into debt is usually a gradual process. We purchase a few things on credit fully intending to pay it back very soon. But buying on credit is so very easy so we buy more things before paying off the first things. Later on, often sooner than expected we find ourselves under a mountain of debt and life has become a little more stressful a little less fun.
Reducing debt starts with a pioneer attitude. You only have $5 left at the end of the month is what your bank tells you. Humbug! You have more than that, you just have to be creative. Start with the little stuff. Eat out one less time per month - saves another $5. Only shop at places along your commute to work - saves gas money. Get creative!
Next step ... so you have cut back, and you've found some extra funds. Don't party just yet - you still need to think about reducing debt not just reducing spending. We're going to take the snowball approach to debt resolution.
Take a good hard look at your bills. Write a budget. List everything you pay, even if you don't pay it every month. Add it up, and allow yourself a buffer - perhaps 10%? - on the bills that fluctuate like electricity. Eliminate what you can. Maybe you find it's cheaper the kill the cable and buy two movies for yourself every month.
Next are your loans. Make a list of all the loans you have, the outstanding balance, how many payments you have left, and the interest rate. Look at the two with the smallest balance. Which one has the higher interest rate? Throw all of your extra funds at that one first, that way you pay it off even faster.
Once loan #1 is paid, you now have that monthly payment AND all the extra from before that you can throw at #2. Keep going with this pattern of reducing debt until it is all gone. Once all of your loans are gone, you will have learned the habit of living inside of very tight means. You might suddenly have $900 extra every month, but you are used to living modestly.
When you've finally gotten out of debt you may want to throw a big party to celebrate. That's OK, you deserve it. Just don't borrow to pay for the party! Now is the time to live like you've just learned to, modestly, within your means, and debt free. Now it's time to start saving and investing in your future.
The savings you "pay" yourself will be useful in the future when you are ready to make large purchases. Instead of financing a new car at 8%, you can stay out of debt and maybe get a discount by paying cash, or you could make a large down payment on a home or send a child to college. The sky is the limit!
Reducing debt starts with a pioneer attitude. You only have $5 left at the end of the month is what your bank tells you. Humbug! You have more than that, you just have to be creative. Start with the little stuff. Eat out one less time per month - saves another $5. Only shop at places along your commute to work - saves gas money. Get creative!
Next step ... so you have cut back, and you've found some extra funds. Don't party just yet - you still need to think about reducing debt not just reducing spending. We're going to take the snowball approach to debt resolution.
Take a good hard look at your bills. Write a budget. List everything you pay, even if you don't pay it every month. Add it up, and allow yourself a buffer - perhaps 10%? - on the bills that fluctuate like electricity. Eliminate what you can. Maybe you find it's cheaper the kill the cable and buy two movies for yourself every month.
Next are your loans. Make a list of all the loans you have, the outstanding balance, how many payments you have left, and the interest rate. Look at the two with the smallest balance. Which one has the higher interest rate? Throw all of your extra funds at that one first, that way you pay it off even faster.
Once loan #1 is paid, you now have that monthly payment AND all the extra from before that you can throw at #2. Keep going with this pattern of reducing debt until it is all gone. Once all of your loans are gone, you will have learned the habit of living inside of very tight means. You might suddenly have $900 extra every month, but you are used to living modestly.
When you've finally gotten out of debt you may want to throw a big party to celebrate. That's OK, you deserve it. Just don't borrow to pay for the party! Now is the time to live like you've just learned to, modestly, within your means, and debt free. Now it's time to start saving and investing in your future.
The savings you "pay" yourself will be useful in the future when you are ready to make large purchases. Instead of financing a new car at 8%, you can stay out of debt and maybe get a discount by paying cash, or you could make a large down payment on a home or send a child to college. The sky is the limit!
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posted by Debt Consolidation Loan at
6:22 AM
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