More Debt Help Tips
 

There is always a way to get out of debt especially if you organize your money and know how to 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:

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 a 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 needed each month.

3. Decrease your expenses by developing a clear strategy and 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 aside the amount for paying your debts. Remember, as we discussed previously, adding an extra amount to your monthly debts payment can decrease the interest payment and save time. When you have extra money with you, and you really do not need to spend it, add this amount to your monthly payments.

7. Being debt free is not only a way to manage your money, but also part negotiation. Try to find the alternative with a lower rate. Negotiate, suggest to your current creditor that you’ve got lower rates with another one; this might entice them to reduce rates to keep you as a customer.

8. Think before you buy! Sometimes you buy an item and later on realize 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 we mentioned in the first article "Understanding Debt", we have good and bad debts, stay away from bad debt. Stay away from:

- 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. Get a used car and attempt to 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 for sure 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 is not a rule to follow, you must change the way you think to be convinced of that.

Saving one dollar every day or any very small amount of money can be useful for a rainy day or to help in your debts.

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

Again and again, we repeat the same messages, keep your credit card for emergencies, do not carry the card with you, and have cash in your pocket unless you really and urgently need it. Leave your credit card at home. Hide it somewhere out of your sight.

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 interests, this is a right for you.

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 won't cost you more than 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 life in your pocket every time and everywhere.

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 while you can save this money for something with higher priority or 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 food, bills, entertainment, transportation, shopping and miscellaneous 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? Bring everything with you to school/university or to work. Have your lunch, snacks and even your drink. It is better than buying from a machine. You will save even a small amount but you are SAVING.

For example, you can save between 1 and 3 dollars every day if you avoid using vending machines. This way you have around 60 dollars each month saved.

Instead of saying that something only costs one dollar, say if I don't buy it that is one dollar that I can put away for a rainy day or put toward debt.

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

If you are in debt, it is a given that you are spending more money than you make. You are in the red. There is no way to play games with yourself about it.

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 shopping or for entertainment until you are managing your financial life the good way. Find something beneficial to do with your time rather than going to the mall. This way, you're reducing your debt, and most importantly, not adding more to your debt. If you cannot keep up, you may enter a debt consolidation program. Do not ever work with private forms or lawyers with these issues. There are plenty of non-profit agencies who are glad and ready to help you anytime by negotiating lower interest rates or by plans on improving your financial situation.

Even though you may not like to have a third party agency help you get out of trouble, remember it is 100% better than bankruptcy and you will have a debt-free date to look forward to.

Take this advice from someone who worked in the credit card industry; pay your bill every single month, whether you have a due payment or not. Look at how much your late and over limit fees are. You could be racking up monthly fees which are added to your principal balance and are then charged interest on the next month.

If you're a real shopaholic, go to the thrift stores. They are often charity run and often don't take credit cards, so you have to pay cash. They keep you living within your means and you can find great stuff there. Go to the well-heeled neighborhoods early for the best stuff. You can get great items if you keep your eyes open. Would you rather have a big credit card bill you can't pay or a few scuffs on furniture or appliances that have lots of life left?

It's a real high to find the things you need and still stay out of debt.

Be honest with yourself, this way you are on the road to freedom. Ask yourself how this happened to me and why it happened.

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.

You should keep one account open for an emergency; we are not saying that you must live without a credit card.

To get rid of the debt stress, you will have to give up many things you consider needs. Believe it 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. Getting a better income will help you to get out of debt. When you are free, take an hour just to think, try to look for a new fresh idea that might help you in improving your income and/or reducing your expenses.

Do not be fooled with brand names, an xyz mouse for your computer will work the same than a xyz2 mouse. It's a mouse! Why do you need to spend double the price for a brand name!

When you have the same item with different brand names and both of them have a 2 year guarantee. In such a situation, do not look for the brand name, look for the cheapest. There are thousands of tricks and ways to save! Always search and save!

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.