Do you need a debt reduction program? You're not alone. Below are 5 tips on reducing debt that you can do right now.
1. Knock Off Using Credit. If you have not done this one, then this is the place to start. Put the credit cards and line-of-credit checks under lock and key, and operate as if you don't have them at all. Figure out how to make more income and pay cash instead. This is the single most effective action you can take.
2. Never Commit to Spending More Than Your Income. When you pay for an item with credit because you don't have the cash, you are committing your future income to pay the credit company. Then you experience economic slavery. Ask yourself if you just want the item or if you really need it to increase your production of income. If you need it, figure out how to make the cash to pay for it over a short period of time, rather than buying on credit. Find ways to increase your income and use it to pay both current expenses and pay off credit debt.
3. Always Pay More than the Minimum Payment Needed. Your reduction of debt method will be most useful should you carve out no less than 10% to 15% of your income. Utilize this money to lower debt. Set a target of paying 3 to 5 times the minimum payment per month on every credit card. Put aside some of the payment money each week until the statements arrive. It is always easier to save small amounts over 4 weeks than pay a large bill at one time.
Your credit card payment approach must also include paying more on the highest interest rate card. Another method is paying off low balance cards as fast as possible. After you pay those cards off, the money that you were paying on those cards can be paid against the highest interest rate cards.
4. Never Pay Late or Spend Over Your Limit. Don't destroy your debt reduction approach by getting hit with late payment or over-limit fees of $25 to $39 on which you will pay interest. Plus, if you pay over 30 days late, that black mark stays on your credit record for 7 years - a harsh penalty to pay. Do you think the credit card company really minds if you pay late or go over your limit? If they did not want you to spend over the limit they could have rejected the charge, right?
5. Trim down Expenses. Reducing debt needs as much cash as possible, as fast as possible. Look closely at where your income is being spent and trim down any expenses that don't bring about the production of more income. Before you spend, figure out how much money that purchase is going to bring back in to you, your family or your business.
TIP: If you are a business owner, always advertise your business to everyone - do not reduce that activity. Make sure you're getting good sales out of your promotional activities than it costs to promote.
Correctly handling the money in a business or household to make certain its survival takes more than a reduction of debt program, but this is a great place to start. There are other steps that you can take to increase income, pay bills on time, have cash reserves for emergencies, increase profits and pay yourself more money. Who doesn't want that, right?
1. Knock Off Using Credit. If you have not done this one, then this is the place to start. Put the credit cards and line-of-credit checks under lock and key, and operate as if you don't have them at all. Figure out how to make more income and pay cash instead. This is the single most effective action you can take.
2. Never Commit to Spending More Than Your Income. When you pay for an item with credit because you don't have the cash, you are committing your future income to pay the credit company. Then you experience economic slavery. Ask yourself if you just want the item or if you really need it to increase your production of income. If you need it, figure out how to make the cash to pay for it over a short period of time, rather than buying on credit. Find ways to increase your income and use it to pay both current expenses and pay off credit debt.
3. Always Pay More than the Minimum Payment Needed. Your reduction of debt method will be most useful should you carve out no less than 10% to 15% of your income. Utilize this money to lower debt. Set a target of paying 3 to 5 times the minimum payment per month on every credit card. Put aside some of the payment money each week until the statements arrive. It is always easier to save small amounts over 4 weeks than pay a large bill at one time.
Your credit card payment approach must also include paying more on the highest interest rate card. Another method is paying off low balance cards as fast as possible. After you pay those cards off, the money that you were paying on those cards can be paid against the highest interest rate cards.
4. Never Pay Late or Spend Over Your Limit. Don't destroy your debt reduction approach by getting hit with late payment or over-limit fees of $25 to $39 on which you will pay interest. Plus, if you pay over 30 days late, that black mark stays on your credit record for 7 years - a harsh penalty to pay. Do you think the credit card company really minds if you pay late or go over your limit? If they did not want you to spend over the limit they could have rejected the charge, right?
5. Trim down Expenses. Reducing debt needs as much cash as possible, as fast as possible. Look closely at where your income is being spent and trim down any expenses that don't bring about the production of more income. Before you spend, figure out how much money that purchase is going to bring back in to you, your family or your business.
TIP: If you are a business owner, always advertise your business to everyone - do not reduce that activity. Make sure you're getting good sales out of your promotional activities than it costs to promote.
Correctly handling the money in a business or household to make certain its survival takes more than a reduction of debt program, but this is a great place to start. There are other steps that you can take to increase income, pay bills on time, have cash reserves for emergencies, increase profits and pay yourself more money. Who doesn't want that, right?
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1 comments:
The debt reduction companies charge a heavy fee for reducing your debt burden. Moreover, some of the debt reduction companies don't fulfill their promise. They just charge fees without taking any initiative to cut down your debts. Due to these reasons, I prefer to reduce debts on my own.
You can reduce debts by following the tips suggested in the article. Make sure you follow each and every tip or your get out of debt mission will not be accomplished.
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