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gold dollarGetting Out Of Debt ...


Remember Kermit the Frog saying "It's not easy being green"? Getting out of debt is not always easy either, but it can certainly be done.

Getting out of debt can take several years and requires spending less than you earn.

That is easier said than actually done for many people who have fallen into that "Debt Ditch".

If your goal is to get out of debt, here are ten tips that can help advance your efforts towards financial freedom.

1. How Much Do You Really Owe? Make a list of your debts, who you owe, the total amount of debt/principle and the interest being charged. Examples of debts include: mortgage, personal loans, credit cards and car payments. Use our handy net worth calculator to do the math for you.

2. Track Your Spending Habits And Patterns. Find out where your money is going. Most of us don't pay much attention to how much money we are spending on things like fancy coffees on the way to work, lunches out, sodas, kids lunches, candies and snacks, bottled water, eating out and magazines. There is more detail about this simple debt management solution here or use our free budget worksheets.

3. Negotiate With Creditors. Your creditors may agree to reduce your debt in exchange for one debt settlement payment or a series of fixed payments. Reputable debt settlement companies can negotiate with creditors on your behalf to reduce the overall debts in exchange for an agreement for regular payments to be made. Be aware that student loans, auto financing or mortgages cannot be included in your negotiations with creditors.

4. Consider Consolidating Debt. A consolidation loan would pay off all your many debts and you would have just one payment to make. The new loan will usually have a smaller payment and a lower interest rate.

5. Set Up A Repayment Plan. Cut back on your expenses and use the freed up cash to pay down your debts. The combo method of debt financial management planning is an excellent repayment plan.

6. Put Your Credit Cards On Ice ... Literally! Stanley Kershman, a bankruptcy lawyer, says "Fill a plastic container with water, stick your credit cards in it, and put it in the freezer. You wonÂ’t be able to use them on impulse buys because it takes hours to thaw them out; and if you microwave them, you destroy all the data."

7. Roll All Your Plastic Debt Into One Payment. Credit card debt consolidation may serve the purpose for getting out of debt, but you need to be vigilant and disciplined.

8. Use Your Assets. If you have significant equity in your home or your car, you may be able to use them as collateral for a loan large enough to pay off all your debt. The lower interest on the home equity loan could off set the high interest credit card debt provided you stop using your credit cards and not increase your debt load.

9. Use Your Assets #2. If you have a car, consider selling it to paying off your debts and buying a cheaper car. Use caution though as you don't want to buy cheaper and end up with a car that requires expensive repairs. While you are at it, consider some of the other items you have accumulated such as CD's, video games and other collectibles. Selling on ebay may be an excellent way to earn some extra cash.

10. Earn Extra Money. If getting out of debt is the priority, use all the money from a second job, a garage sale or a work at home business you start up, to pay down your bills.

checkmarkMore tips for debt elimination.

Here are some 'bonus tips' for getting out of debt:

checkmark Use our step by step debt action guide for getting out of debt.

checkmark Use the Services of a Credit Counsellor. Credit counsellors can assist you in developing the discipline you need to establish control of your debt.

checkmark Bankruptcy may be the only way for you to get a fresh start. Bankruptcy offers a quick solution to getting out of debt if these other alternatives won't work for you.













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FYI ...

To achieve financial freedom, ideas such as: listening to good advice, learning how to make a budget, understanding credit repair possibilities, avoiding the scams, and generally becoming more knowledgeable of the credit card business, can all play a role in eliminating credit card and other debt. There is A smarter way to manage your money.



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