Debt Reduction
Debt Reduction
Debt is a vicious animal in many people’s lives. We use credit cards for everyday expenditures when we’re low on cash, we don’t pay off our balances, and when the bills come each month we’re darn lucky if we can even pay the minimum fee. Sound familiar? Unfortunately, there are more people in debt than ever before; and that number is rising every year.
We are a nation of Wimpy’s - wanting our hamburgers today without actually paying for them until Tuesday - or, more accurately, paying for that hamburger for years to come. With hiked up interest rates, minimum payments will NOT pay off, or even reduce your debt. Read that again. Anyone that is serious about reducing debt has some tough decisions to make.
There are several basic steps you can start taking immediately. As in this instant. The first of which is to not increase your debt further. Take all of your credit cards out of your wallet and put them somewhere safe. Don’t use them for anything. If you can’t afford to pay cash, don’t buy it.
Phone each of your creditors and explain your situation to them. Ask if they can reduce your interest rate, late fees, over the limit fees, and/or payoff amount. You may be surprised at the amount of total debt you can reduce just taking this simple, if time consuming, step. Many credit card issuers will be willing to work with you as long as you are willing to work with them. This means no more late payments - if you make an agreement, stick with it. If you can’t, call them again.
Begin paying more than the minimum each month. This sounds simple, right? But if you don’t have that much expendable cash, how can you do this? Target one debt at a time, and even if you can only afford ten extra dollars, that small amount will still assist you in getting that balance down faster.
Create a worksheet detailing each of your debts and your monthly income. You need to see with your own eyes what your financial situation is. With this information, you can develop a budget to help you reduce your debt. Be honest with yourself on what you can practically, and emotionally, be consistent with. The goal here is to make progress - you didn’t get into debt overnight and you won’t get out of it that fast either. Slow and steady wins the race.
If you’ve done all this, and you still feel overwhelmed, and want some professional assistance; there are debt counselors that can help. Don’t be afraid to set an appointment with a credit counseling agency to get the advice you need.
While the road to reducing your debt won’t be easy, the end result will be well worth it. Knowledge, combined with focused budgeting, will get you where you need to be - a debt reduced future.
