There is always a way to get out of debt especially if you organize your money and know how to and when to pay.

If you follow the steps below, you can help yourself by 90% to become debt free.

1- KNOW what you owe.

You must know and identify clearly what you owe; the best way is to create a debt list with details for example:

And identify which payment has the highest rate thus allocate the highest priority to it.

2- Avoid creating new Debts. When you are already in debt, do NOT create a new debt. Try your best to create savings strategies for the expenses that you do not pay monthly, for example some bills are paid quarterly. Even though, this bill is paid quarterly, keep aside the amount aside each month.

3- Decrease your expenses by developing a clear strategy and try to increase your income.

4- Do not always use your credit card.

5- Always create a list of items you plan to purchase and know the amount you are planning to spend. 

6 – As soon as you develop a plan with your monthly income and expenses, you can set the good amount for paying your debts. Remember, as we discussed previously, adding an extra amount to your monthly debts payment can decrease the interest payment and save time. When you have money with you, and you really do not need them as an advice add this amount to your monthly payments.

7- Being debt free is not only, a way to manage your money, but also a negotiation part. Try to find the alternate with a lower rate. Use negotiations, pretend to your current creditor that you’ve got lower rates with another one; this might help reducing rates to keep you as a customer.

8- Think before you buy! Sometimes you buy for an item and later on identify that you do not really need it at the moment. Think well before planning to buy. Ask yourself “do I really need this item?”

9- As we mentioned in an earlier post, we have good and bad debts, stay away from bad debt. Stay away from:

     – High interest credit cards

- High interest items

- Big mortgage

10- Do not buy a brand new car when you cannot afford to pay it. As an advice get a used one and keep it for many years.

11- Be smart and reasonable.

Those are some steps toward being debt free, but getting out of debt is challenging but for sure it can be done especially with dedication and perseverance.

When you are asked to decrease your expenses, cancel your credit cards, develop a plan, etc… you are changing the way you live, and especially the way you think. Following the steps mentioned above is not a rule to follow, you must change the way you think to be convinced with that.

Saving one dollar every day or any very small amount of money can be useful for a rainy day or to help in your debts.

Always pay off the smallest bills at first, this way you will save some money and add it to the highest bill. This works in most cases when you have for example 5 bills. You pay the small then allocate an extra payment from the saved amount into the higher bill.

Again and again, we repeat the same messages, keep your credit card for emergencies, do not carry the card with you, and have cash in your pocket unless you really and urgently need it. Get out of troubles, and put your credit card at home. Hide it somewhere out of your eyes. 

Take this into consideration; the credit card business is very competitive. When you always make your payments on time, call and ask to lower your interests, this is a right for you.

In the next post we shall continue with our plan so look in soon.

Tags: bad debt, big mortgage, credit card, credit card debt, deal with debt, debt free, debt help, debt plan, debt reduction plan, getting out of debt, high interest credit cards, interest, Interest Payments