The main reason why so many people today find themselves in debt is due to rampant usage of credit cards! Yes! It's true. Credit cards offer the convenience of taking the goods home today and paying for them later. And this convenience has been misused by our generation beyond belief! On top of that, due to the economic recession, so many people find themselves without jobs. This means no or lesser income, more purchases on credit card, more amount due on it and a person, neck deep in debt!
Debt is a dreaded word! Once you fall in it, it takes a lot of planning and perseverance on your part to get yourself out of it. It would take some really good debt management tips and techniques to bail yourself out of this unwanted situation.
Make Monthly Budgets and Stick to Them!
It's very important that you make a budget every month, listing out all your incomes and necessary expenses. There are some expenses which you cannot cut down on such as food, house rent, electricity bill, etc. However, there is some unnecessary expenditure that you can certainly do without. For instance, buying new clothes and cosmetics even when you have a cupboard full of them, taking a yearly membership of a gym when you do not even go there once a week - these are some of the examples of expenses that you should cut down. So, the first advice is to eliminate all unnecessary expenditure. Prepare a monthly budget and stick to it.
Become a Smart Shopper!
When you set out shopping, make use of discount coupons wherever you can. Shopping from second hand stores, shopping for things online, buying from discounted stores, these are some of the ways to reduce your expenditure, which will keep in check any further additions to your debt.
Use Cash for Payments and Keep Only One Credit Card!
Wherever possible, use cash for payments. This will ensure that you only buy things for which you have money available. Reduce your credit card usage to the minimum. One of the best tips here is to keep only one credit card and give up the rest. Lesser the number of credit cards, lesser will be their usage and lesser will be the probability of you being in debt! Moreover, you won't have to keep a track of a number of last dates of payment if you have only one credit card. This will keep the tendency to default on payments due to bad memory, under check too!
Start Paying Off the Debt!
For those of you who already have a lot of debt accumulated on their credit cards, it is time to start paying it off, one by one. So, take out all your credit cards, write down the payments due on them as well as the interest rates that you pay on them. Start with paying the credit card debt on which you are paying the highest rate of interest and then move on to the next highest and so on. In case you have a credit card, on which very small amount is due, you can pay this debt off first and give up the credit card altogether! Remember, only one credit card is more than enough!
Consolidate your Credit Card Debt!
While paying off your debts, you can go in for debt consolidation. By doing this, you can transfer all the amounts due on various credit cards, in one card. This will lower the overall interest rate that you pay on the debt, at the same time, will save you the headache of keeping track of a number of credit cards, their due dates and due amounts!
Negotiate for Lower Interest Rates!
Negotiate with the creditors, be it banks or private lenders, to lower your interest rates or the amount due. A good way to negotiate, provided you have the money, is to offer them a lump sum, which is lesser than the amount you own, all at once. Sometimes, the creditors may agree to this arrangement, if they feel that they might lose out on the entire money you own them!
Take Help from Consumer Credit Counseling Service (CCCS)!
Get in touch with CCCS for debt reduction assistance. They have certain eligibility criteria which you have to meet first. After that, they will negotiate with your bank to lower the interest rate on the credit card. The CCCS will pay your credit card company and you in turn will have to pay them some predetermined amount at regular intervals.
Take a Second Job!
If you are finding paying off your debts a bit difficult due to lower income, supplement it by taking up a second part-time job. Internet has opened up many avenues for earning some good, extra income from the convenience of your home. So, look for online jobs, earn money and pay off your impending debts!
One of the major benefits of debt management is that if your finances are sorted out, you will be able to lead a very stress-free and happy life. So, once you pay off your debt, spend wisely and inculcate the habit of saving. This will keep you from falling into the vicious cycle of debt again.
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