Tips for Debt Management

Have you ever struggled to just keep your head above water? If you are anything like most Americans, the answer is probably yes. I’ve been there and now know the freedom that comes with being truly debt free. I utilized a few great tips from some well known authors (ever heard of Suze Orman?), and managed to break out of the horrible cycle. I’m here to share some of those tips and hope that they can help you as well.

Step 1: Compile a list of all debt(Primarily credit cards)

Step 2: Determine your interest rate on each of those cards, starting
highest to lowest.

Step 3: Breath! Don’t panic.

Step 4: Determine costs of living.
(rent/mortgage, utilities, etc.)

Step 5: Determine your monthly net income.

Step 6: Subtract number 4 from number 5.

Step 7: Whatever that number is, no matter how small, this is the
number you need to focus on, it needs to work for you.

Step 8: Remember that list you made back at numbers one and two?
You will need to find the minimum payment on each of those.

OK, now that you have all of these numbers in front of you that are giving you this massive headache, you have can begin the process of getting rid of all of this nasty debt. That credit card that is at the top of your list, that is your target! Did you know that you can call up these creditors and negotiate a lower interest rate? It’s true! Try it, whats the harm? It may not work every time but it is definitely worth a try.

Secondly, you need to take all of the money that is left over after paying your living expenses and pay each minimum payment. Anything that is left over will go towards that first credit card (It has the highest interest rate). Continue this strategy, once the first card is paid off move on to the next, so on and so forth. You will notice that with each and every card that you pay off it becomes easier to pay higher amount on the next card. (Always pay the absolute most that you can on your highest interest card, you don’t want to be paying all of that interest every month!)

This is the plan that worked for me, it really works, there is no gimmick, no shortcut. You just have to buckle down and do it. It might mean that you will have to cut down on the Starbucks, eating out, or even carpooling, but you have to do it! I hope that these tips can help someone else get free from debt. If you want any other helpful tips, I would suggest any of the selections by Suze Orman. Hope you enjoyed the article, hopefully I can write again soon. Thanks and Good Luck!