When you have way too
much debt, it's natural to want to get rid
of it as quickly as possible. Interest
charges can really add up, and having too
much debt makes it difficult or impossible
to take on debt for things you need. But
when we're faced with more debt than we can
handle, it is important not to panic.
Getting out of debt on one's own is best if it's possible. But many debtors
make the mistake of trying to pay their debts off too quickly. They set
unrealistic goals, and when they can't achieve them they become discouraged.
This often ends with them filing bankruptcy, because they feel that there is no
way around it.
The best course of action is to be realistic. Make a budget, and include
everything that you spend money on each month. Then find what you can
realistically do without, and put the money you save on those things toward
paying off your debt. Here are some things we can often cut out of the budget:
- Eating out. Whether you pick up fast
food for lunch when you're working, or
go out to eat with friends at a fancy
restaurant once a week, you can cut
costs here. Take your lunch to work, and
have dinner with your friends once a
month instead of once a week. Or better
yet, suggest a less expensive activity
that you can do together.
- Vices. Cigarettes, lattes, and other
things we buy as a matter of habit are
good places to cut back. Quitting
smoking is good for you anyway, and
switching to regular coffee, made at
home with some flavored creamer, would
be less expensive. Every little bit
helps.
- Entertainment. No one's saying that
you have to sit at home and be bored all
of the time. Just examine your
entertainment budget and see if there
are ways you could cut back. If you rent
a lot of movies, for example, consider
signing up for an unlimited plan.
- Travel. With gas prices usually
going up instead of down, cutting back
on travel can be a real money saver.
Carpooling, and combining trips as much
as possible, are two ways that can save
you a substantial amount of money on
travel.
It may take you several months or even a
few years to get your debt paid off,
depending on how much debt you're in and how
much extra money you can put toward it each
month. But as long as you're able to make
your minimum payments and add a little extra
to at least one of your bills each month,
you will be making progress. You'll also be
keeping your credit in good shape by making
the payments on time. Just be patient, and
you will eventually be debt-free.
Recommended Reading
Debt Free
In Three
Thanks to this guide complete with
worksheet and personal coaching, my family
and I will be complete debt free in 42
months (including paying our house mortgage
in full). The principles taught in this
program are simple, yet incredibly powerful.
See for yourself.
Click here to get Debt Free in 3 to 5 years. |
