Entry

How can I get out of debt quickly?

Apr 4th, 2006 16:19
Steve Diamond, http://finance.necessaryvirtues.com/

Step 1. Stop accumulating new debt!
This is the first and most important step. If you keep charging, you
will dig yourself a deeper hole.
Step 2. Prioritize your payments.
Make a list of all your monthly obligations. Then arrange them in order
of priority. Start with those that you can’t do without, like your
mortgage payment and your utilities.
Next are the credit cards and store cards that charge the most interest.
By paying off the cards with the most interest you can reduce the amount
of interest calculated on your next bill. This means you will pay off
your entire debt as quickly as possible.
Step 3. Find ways to cut back on expenses.
You will be surprised at what you can save when you cut back. Make a
list of all of your current expenses. This includes all your shopping,
hobbies, magazines, newspapers, treats, everything. Then take a look at
the list and remove all non-essentials. No cheating! A cup of Starbucks
latte is not an essential expense. If you buy one each working day, you
can save roughly $100.00 a month by stopping. (That’s $4.50 per latte
times 22 working days in a month.) That’s quite a lot of money when
you’re swimming in debt. Maybe it could make the difference between
swimming and drowning.
Step 4. Contact your creditors.
If you just can’t keep up with your payments, don’t be afraid to contact
your creditors. They will try to help you. It costs them much more if
you default than it does to work with you, so they have just as strong
an incentive to work something out as you do. If you’re having trouble
meeting your payments, tell them. Be realistic about what you can
afford. You may be able to negotiate a new payment plan that you and
your creditors can live with. It’s much better if you contact them first.
When you and your creditor agree on a plan, be sure to stick to it and
to keep in touch. This will earn you the trust of your creditors.
This is a summary. More detailed information available at
http://finance.necessaryvirtues.com/debt/debt-reduction/get-out-of-debt-in-four-easy-steps.html.