How To Reduce Debt

Many people today are struggling to pay their bills.  This usually means that people are using their credit cards more, or they are borrowing more money from banks or mortgage companies.  This offers a temporary solution for cash shortages, but it can increase the amount of your debt as well.  The only way to extricate yourself from this situation is to reduce your debt.

It is not hard to learn how to reduce debt.  All it takes is a little research and effort.  If you are in a situation where you have money left over each month - even a little bit - you can start by paying a little extra on credit cards and small mortgages or loans.  Even $25 or $50 per month extra can help you pay your debt off faster.  Doubling your payments each month will help you pay debt off even more quickly.  Also, look for ways to cut down on your monthly expenses.  You should examine your grocery bill and determine where you can save money.  Start using more coupons so you can apply some of those savings toward your debt.  If you eat out a lot, try cutting back to one or two meals out a week.  Start making a conscious effort to track every penny you spend.  Start eliminating some of the unnecessary spending, and use that money to double up on credit card bills or loans.

You can also use debt consolidation services.  There are a number of these companies who market their services.  They advertise on the radio or on television every day.  Talk to several of them about consolidating your bills.  Choose one that is reputable or at least has a strong track record.  Always check with the Better Business Bureau before signing any paperwork with a debt consolidation company. The company you select will ask you for information on all of your bills.  The more you owe, the higher your monthly payment will be.  These companies will normally be able to cut 50% off your total debt, especially for credit cards or for smaller loans.  The debt consolidation companies will add a percentage to your total bill for their commission.  Debt consolidation companies normally set a time period for paying them back.  It is normally two years or less.  The time period is much shorter than the amount of time it would ordinarily take you to pay the debt off.

When the debt consolidation company determines your monthly payment, calculate the amount extra you can save on a monthly basis.  You can then apply that extra money toward longer-term debt such as your automobile loan or your mortgage.


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