Getting Out of Debt Tips

Mismanagement of funds, over spending, excessive credit card usage are some of the primary reasons why so many people in America find themselves in debt. The recent recession and job lay offs have expounded this situation, with many people finding themselves caught up in a cycle of debt, wherein they take a loan for meeting their expenses and end up in even more debt where they have to pay interest on the same. Getting out of debt, though is not an easy job, yet it's not entirely impossible too. All it needs is a bit of planning, restraint and management on your part. Here are some getting out of debt tips which will prove handy too.

Tips on Getting Out of Debt

Spend Wisely
To start with, change your spending habits so that there is no further addition to the debt which you already have. Buy only those things which you really need, and avoid shopping on impulse. Also, people tend to spend a lot on their housing costs. Ideally, the housing costs should be below 33% of the total household income. If you are spending more than this, try to bring down the housing costs through options such as refinancing home mortgage and lower insurance rates.

Save
Although you may think that you are young and working and do not really need to save money, yet, on the contrary, saving for certain untoward unforeseen circumstances is a habit which one should inculcate, so that a situation of debt or taking loans does not arise in the first place.

Pay Credit Card Debt
Most of the debt these days is due to the unpaid credit card payments. So, one of the most helpful tips for getting out of debt is to start paying for your credit card debts one by one. Ideally, credit card debt on which you pay the highest rate of interest, should be eliminated first.

Use Cash
Most people hold a number of credit cards these days, and thus, find it difficult to keep a track of the due dates, interest rates and other payments for the same. So, one of the most effective getting out of debt tips is to stop using credit cards and use cash like old times. If this seems too unrealistic, you can keep a single credit card and get rid of the rest.

Debt Management Plan
You can opt for a debt management plan, offered by Consumer Credit Counseling Service (CCCS). Of course, you will have to meet their eligibility criteria first. Once you do that, the CCCS, in order to bring down your interest rates on credit card debt, will negotiate with the credit card company. The CCCS will make payment to the credit card company on your behalf too. In return for their services, you will make periodic payments of pre decided amounts to the CCCS.

Negotiate with Creditors
Sometimes creditors, and that includes the credit card companies as well, are willing to reduce the overall debt amount if you assure them that you will make their payments within a particular time frame. So, negotiate with the creditors and try to bring down your overall debt amount.

Opt for Debt Consolidation
Another useful tip for getting out of debt fast is to go in for credit card debt consolidation. Under this, you can shift all the impending balances of your various credit cards under one credit card. This will not only make your debt repayment easy, but also reduce the interest amount on the accumulated debt considerably.

Besides following the above mentioned getting out of debt tips, there is one more thing that you can do to eliminate your debt, and that is to supplement your income. Work over time, get a second job, make money through Internet, basically do anything which adds to your income and helps you to get rid of your debt fast.