Need a plan to get out of debt? You are not alone. Here are 5 things you can do right now to get out of debt.
1 - Using Credit as a Knock-Off
If you haven't done this one yet, you should start here. Lock up your credit cards and checks for your line of credit and act like you don't have them. Find ways to make more money and pay in cash. This is the one thing you can do that will have the most impact.
2: Don't promise to spend more than you earn.
When you buy something on credit because you don't have enough cash, you promise to pay the credit company out of your future income. Then you are a slave in terms of money. Think about whether you just want the item or if you really need it to make more money. If you need it, find a way to get the cash to pay for it quickly instead of buying it on credit. Find ways to make more money and use it to pay off credit card debt and current bills.
3: Always pay more than the required minimum.
Your plan to pay off debt will work best if you set aside at least 10 to 15 percent of your income. Pay down your debts with this money. Make it your goal to pay 3–5 times the minimum monthly payment on each credit card. Set aside some of the payment money every week until the statements come. It's always easier to save small amounts over 4 weeks than to pay a big bill all at once.
Your plan for paying off your credit cards should also include paying more on the card with the most interest. Another plan is to pay off cards with low balances as quickly as possible. After you pay off those cards, you can use the money you were spending on them to pay off the cards with the highest interest rates.
4: Don't pay late or spend more than you can.
Don't ruin your plan to pay off debt by getting $25 to $39 late payment or over-limit fees on which you'll have to pay interest. Also, if you pay more than 30 days late, you get a bad mark on your credit report that stays there for 7 years. This is a high price to pay.
A Vice President of a U.S. bank recently said that interest, late fees, and over-limit fees on credit cards added up to more than $24 billion last year. Do you really think it matters to the credit card company if you pay late or go over your limit? If they didn't want you to go over the limit, they could have stopped the charge, right?
5 - Spend less money.
To pay down debt, you need to get as much cash as possible as quickly as possible. Look carefully at how your money is being spent and cut back on any costs that don't help you make more money. Figure out how much money that purchase will bring you, your family, or your business before you buy it.
TIP: If you own a business, you should always tell everyone about it. Don't cut back on this. Just make sure that the money you make from sales is more than what it costs to advertise.
More than a debt reduction programme is needed to make sure a business or family has enough money to stay alive, but this is a great place to start. There are other things you can do to make more money, pay your bills on time, save money for emergencies, make more money, and pay yourself more. Who wouldn't want something like that?
