Being debt free is becoming ever the more important with today's tough economic times. The problem is debt is an integral part of everyone's life and in some ways allows us to get by on a daily basis. Think about how many times a day you use that card, and think to yourself, 'I can pay it later.' Well that is exactly the mentality that gets you in trouble down the road. While having some debt is necessary, living through debt is not.
It's time we start to live within our means and free ourselves of unnecessary debt. While many people love the idea of being debt free, they don't necessarily know how to get rid of all that debt. Below are some steps to follow on how to turn that burden of debt into a thing of the past.
Know Your Credit
Check your credit score and look through the report to make sure there are no erroneous claims that may be hurting you. You can check you credit for free once a year at AnnualCreditReport. This is the one place to truly get a free credit report. Other sites offer free credit reports, but be sure to read the fine print and do not give your billing information.
Organize Your Expenses
You can keep a paper tab of all your debts or if you are computer savvy you can use the program Microsoft Excel. Add up what your total debts are (credit cards, car payments, student loans,etc), and then find what you monthly payments are for each. This will give you a clear understanding of what you are paying.
Now that you have a list of all your debts, get on the phone and renegotiate better terms. It is not guaranteed, but more than likely they will be willing to work with you. They would rather keep you as a paying client than for you to not pay anything at all.
Time to Pay Something Off
Gather a list of your debts and look at what has the worst interest rate, or highest balance. More than likely this will be a credit card since they usually have the highest interest rates. Paying just one debt off will help immensely.
Use Your Credit Card Wisely
Don't charge everything you buy on your credit card. Be smart with it and use cash when possible. Also be aware of extra charges for using your credit card at certain stores, many times the charge may be more than the amount you spent. If you do use your credit card, use the card that has the most rewards for using.
Freeze Those Cards
Take all the cards you have, but one for you and one for you wife or husband, and freeze them. Literally put them in a plastic bag fill it with water and put them in the freezer. The reason for doing this is because you want to keep those accounts open, otherwise you will be penalized on your credit score for closing them. This also stops you from using them out of temptation. If they are frozen then you can't use them.
Talk with a Credit Counselor
Hopefully this step is unnecessary, and you are able to sift the debt on your own. If not, then it is important to seek professional assistance before it is too late. A great place to find credit help assistance is NFCC - the National Foundation for Credit Counseling. This site should give you other great debt management tips and help you in contacting a credit counselor.
Remember debt is not a bad thing, but just like anything else you only need it in moderation. Live within your means and pay down that debt.
This article was provided by the authors at LiveLoveCoffee.com an online coffee shop with articles discussing interesting morning chats and reviews on french press coffee makers, coffee grinders and espresso coffee machines.