I’m sure right now, if anybody was to show you how to stay of debt you would jump at it right away. The last 2 years or so have simply been hell for most people, the mortgage debt, credit card debt, car loan etc the list is endless. But there are very few ways a person can do to ensure that your bank statement and other financial records are always on the positive side. This is by following simple steps that most people take for granted, but can make a lot of difference. Here are a few steps suggested by Matt Paulson that can solve your problem.
For some, job layoffs and unforeseen external factors have loaded them up with debt. However, for most, debt is the result of extraneous spending, poor money management, or both. Please read on for ten tips to getting out of debt. Some are easier to follow than others, but all are designed to help alleviate the problem:
Create a realistic monthly budget for your expenses.
List all monthly bills and necessities, and make sure they are covered by your monthly income. Stick to your budget; any money left over after paying your budgeted expenses can be spent elsewhere. Stick to the budget!
Pay the credit cards down in full. (the exception would be if you owe more than 50 percent your cards limit).
First, pay all balances to below 60 Percent of the card limit because balances above this level cause your credit score to diminish. Then pay off the balance on the credit card with the highest interest rate. If the account was opened within the past year and you have additional older accounts, close it after it is paid off. Repeat these steps next month with another card. Continue until you reach the credit card with the most favorable terms (i.e., low-interest rates). Use this as your preferred account. You need only four open accounts to establish a positive credit history.
Get an Emergency Credit Card
Have one primary credit card, and use it only for emergencies or major necessities, such as an emergency room visits. Hide your credit card from yourself to resist temptation. Also, avoid accepting increases on your credit card limit above an amount you can easily pay off in three months.
Use direct deposit for your compensation
Put together a set limit of how much money you will allow yourself to withdraw each week.
Cut down on your unnecessary spending.
This includes dining out, overusing your cell phone, and other such unnecessary expenses.
Evaluate your living situation.
Your housing costs should be no more than a third of your household income, including mortgage payments, property tax, and both property and homeowner’s insurance. You can shop around for lower insurance rates, refinance your home mortgage, and look for more economical utility plans.
Avoid taking out a loan to get out of debt.
Many people think this is a way of helping them get out of debt. Borrowing money, whether from family or banks is not a good idea.
Contact your Creditors and try to work out repayment plans.
Many creditors are willing to work with you in a manner that will help them get their money without having to resort to debt collectors.
Become a savvy shopper.
Look for deals. You’d be surprised at how much you can save if you take the time to shop around. Check out the price comparison Web sites such as Shopping.com and BizRate.com.
Look for extra ways to make some money.
From part-time work to a garage sale to taking in a boarder, there are many ways to bring in some additional income.
If all else fails, seek out help from a debt reduction specialist or counselors who can help you