Effective Ways to Get Rid of Debts Once and For All
Some of us, can fare very well with debts, paying above the minimum on every account/debt, and aware of what to spend. For others, somehow, debt is a “curse” that has them followed by creditors. If you are overwhelmed by debt, quick and drastic moves are needed to breathe the hope of getting out of it. Check these friendly tips:
> Stop bleeding yourself to death – It is the first-aid tip when there’s a life-threatening injury. Same rule holds true when your financial survival is on the line. When there’s a lot of cash involved to settle debts, you basic needs can be compromised and might lead you into bankruptcy. Stop adding on your debts.
> Picture a debt-free life – Try a little visualization therapy to motivate yourself. How would you feel if you are debt-free? How would you live? What are you long term goals and accomplishments? Feeling good about these “pictures” of yourself will do you good in deciding to steer clear from debt.
> Work on a full budget check-up – Take a thorough review of your budget. Keep track of every penny coming in and out to have a hands on of how much you can pay against your debt.
> Steer away from climbing the debt ladder – Once you’ve trimmed down your budget to pay significantly more than the monthly minimum on your bills, you can either apply the extra payments evenly on all your accounts or choose a payback strategy that focuses on paying off one or two accounts first before moving on to the others. While you’re ramping up payments, you make minimum payments on the others. When your highest-interest balance is gone, you move down a rung of the ladder and apply all your extra payments to the account with the next highest rate. You repeat the process until all your debt is eliminated.
> Create a repayment snowball – One of the common strategies in paying off debt is called snowball. Instead of using interest rates to determine which account to pay-off first, focus on the size of balances. Start by putting extra money on the account that has the lowest balance and, once paid off, shift funds to the next one up.
> Ask you creditors for assistance – Yes, you read it right! What we don’t realize is that, creditors are very much willing to work with debts concerns. Explain your circumstance if unemployed, earning low and can’t cope with payments, or a medical emergency. They may be able to waive your interest charges temporarily.
> Seek for credit counseling – If you can’t seem to figure out on how to come up with a debt-elimination plan, your next best option is to seek professional help from Credit or Financial Advisers. A professional credit counselor can help you review your debt situation and identify repayment options and money management techniques that you may not have thought of on your own.