| If you are one of the millions of Americans that have found yourself in a financial black hole because of excessive credit card debt, there is hope. A good debt reduction planner can help you get out from under your debt. This method isn't a quick fix, it will take time and determination, but it can work for you if you work on it.
This method of debt reduction has nothing to do with consolidation loans, home equity loans, etc. This is all about taking control of your finances, about setting a realistic budget and sticking with it. It will require you to be disciplined with your finances and to stop making frivolous purchases on credit for things you can't afford and don't really need.
So many people have credit cards for 'emergencies' the problem is that buying a new big screen T.V. really isn't an emergency. Few people have the willpower to say no to these temptations and because of that they find themselves in over their heads with excessive credit card debt.
Here are a few basic steps you need to take in order to re-take control of your finances and be completely debt free. You don't have to stop once you've got your credit cards paid off either, you can continue until your car loans and ever your mortgage are completely paid off. Think of it, how great would it feel to not have any debt at all?
Just follow these steps:
1) Before you can be debt free you need an accurate picture of your current situation. No matter how overwhelming it may seem you need to make a list of every debt you have. Include interest rates, balances, etc. You also need to add any household expenses such as groceries, utilities, phone, etc.
The idea is to know exactly what your monthly expenditures are. Once you have all this listed you will need to make a detailed monthly budget. You can't leave anything out, make sure you include at least minimum payments to all of your debts along with all of your normal household bills.
2) Pick out one debt, usually the smallest one. Now instead of just paying the minimum payment on this debt you will pay extra every month. How much extra? As much as you can. You already have a complete budget developed where you are making payments to every debt you owe, now you just have to take whatever is left over and apply it to this one debt.
Just making the minimum payments won't get you out of debt since these are only interest payments and you're not touching the principle If you can add even a small amount to the principle every month you can dramatically decrease your debt.
3) Once that first debt is paid off completely take the extra money you were paying on that debt and apply it to the next smallest debt you have. Remember you are still making minimum payments on all of your other debt.
If you follow this method you will find yourself debt free. It won't happen overnight and how long it takes will depend on how much of the principle you pay down each month, how much total debt you have, and how disciplined you are. But this method has worked for thousands and it can work for you too.
This is the best debt reduction planner because you aren't just 'rearranging' your debt like you are with debt consolidation loans or other types of loans, you are actually paying it off completely. |