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Finance Personal Finance How to be Free from Debt
| How to be Free from Debt |
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| Written by Eric Frey |
| Friday, 03 April 2009 08:40 |
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If you're like a lot of people today, you have more debt than you know what to do with. However, getting rid of that debt can be a really tricky proposition. There are three key components to becoming debt free: paying it down, reducing your expenditures, and - if that fails - talking to a debt counselor. Let's take a look at all of them. The best way to pay your creditors is to pick one and send them as much money as you can. Pay the minimum payments on the other debts. If you do this every month you will soon pay off that debt. At this point, you will want to pick another debt to pay off and do the same thing. Do this until you have no more creditors to pay. If you can, pay your creditors more than once a month. Your phone, cable, and power companies won't add interest to your balance due, so they don't need to be paid frequently. However, credit cards and loans that are incurring interest on their balances should be paid as quickly as you can. Determine the amount you can pay them per week. You can split your monthly payments up by the week - a $100 monthly payment can be paid in $25 weekly increments to reduce interest. Send a check with the account number written in the memo section each week, and send a note to make it clear what balance you're paying. You should also lower your expenditures. You will need to make some changes in your lifestyle if you want to be debt free, since you will need to put aside extra cash to repay your debt. Without lowering your expenses you will not be able to repay that debt. If shopping is a favorite pastime, limit yourself to a certain amount of money, and only pay cash. That'll keep you from running up larger bills. If you enjoy restaurant eating, limit that to special occasions, or choose to have a barbecue or other fun home cooking event that'll be less expensive. Rent videos and have friends over instead of a theater trip and hit the library, not the bookstore. Utility bills and other monthly necessities can also be trimmed by developing good habits and going over your plans with a fine toothed comb. It may only save you pennies, but those pennies add up! If things seem impossible, seeing a debt counselor is a smart option. Admitting that you're in debt and getting help from a professional debt management company can make a big difference in your life. Most good companies will offer you a free, no-obligation counseling session, where they'll analyze your situation and suggest options to you. Prepare a list of your bills and debts before going in, with the total owed, creditor's name, interest rate, and what you pay per month. That way, the counselor will have a very good idea of where you stand financially. A debt counselor will negotiate for you a payment plan that will be satisfactory to both yourself and your creditors. Since they have already worked with your creditors in the past - they can get you a better deal than you would get if you tried to negotiate something yourself. Make sure you understand how your credit score will be affected by your plan, and when you are satisfied with the plan - start it right away so that you will become debt free as soon as possible. About the Author: Eric Frey is a MBA student who is extremely interested in the subjects of debt management and financial freedom. If you are in debt and want to find out how to become 100% Debt Free in 3 to 5 Years or less, regardless of your income level or where you live, the secrets that Eric uncovered may interest you. For more information visit Your Financial Freedom Guide and find out what he did. Kindly provided by LJ-Marketing.dk You are welcome to use this article on your own website, if you include the link just before this text. |
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