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Tips to Start Getting Out of Debt

February 23, 2012 | Comments: 0 | Views: 136

Debt, the four letter word that terrifies many and has brought much distress to individuals and families. Many people want to get out of debt but they do not know where to start. If we do not address this problem, we may find ourselves stuck and sinking deeper and deeper into debt.

The very first step in getting out of debt is to admit that you have a problem. Ignoring and leaving it for another day will not make it disappear, in fact it will lead you to more damages with more interest to pay. It will also cause you emotional stress and can definitely drag your mood down. By admitting that you have debts, you will be able to accept the fact that you have spent more than you can afford and you are now ready to get out of it. This gives you the correct mindset to go ahead and set goals and design a plan.

First of all, list all your debts. It is important to be honest and know exactly where you stand. List debts such as credit card bills and other expenditures that you may be behind such as your car loan and insurance premiums. Put the amount owing, calculate the interest and write down the minimum payment amount. From here, you will be able to see more clearly how much you have to pay monthly and can then set out to have an achievable plan.

If you are already in debt, stop digging deeper into it. If your weakness is in credit cards, cut them up and stop spending on non-essential things. Look at your past spending pattern and only spend on necessities such as groceries, bills and gas. Look at the things that you buy and see if you can make small temporary cut backs. Switch to cheaper brands and minimize your gourmet coffee intakes. Start preparing your meals at home and brew your own coffee. Add up how much your cut backs will save you and you will be pleasantly surprise.

Also, you may want to start an emergency fund. Start small and try to save $1000 for a start. It you do not have this fund, you will tend to skip your debt repayment and use it to pay for the emergency expenses such as car repair and medical bills. And also, grow your income and look at the ways you can make extra money. Teach part-time if you are good in a language or instrument. Freelance if your skill is in design.

Finally, celebrate when you clear each debt. You will feel satisfied and be motivated to stick to your getting out of debt project. Celebrating does not mean extravagance. Celebrate by having a good home-cooked meal, a bottle of wine or a piece of very good cake.

Behind on bills and swimming in debt? I have received countless questions over the years from people wanting to know how to get out of debt. I created a list of easy ways to make money which people use a foundation to pay down debt. To find out more, please visit: =>

Source: EzineArticles
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