The statistics are staggering when you consider that the vast majority of people are riddled up to their necks in debt. It is so easy for us to get caught up in the spur of the moment when our emotions just overwhelm our intellectual decisions. However, there is no need to regret the days gone by, or the ill-fated decisions that have lead to this moment of your life. What we must do instead is learn from our past mistakes, and work today to effectively manage and pay off our debt once and for all.
Once you have successfully adopted a strategy to reduce and pay off your debt, only then will you be ready to move onto wealth building strategies that will grow and compound your money.
Here are a few debt management suggestions to get you started along your journey towards a debt free life:
Get on Top of Your Debt and Track Spending
The first place to begin when it comes to taking control of your debt is to determine what you owe, howmuch you owe, and to whom you owe it. Once you have moved through this step, your second task will be to develop a means to track your spending. Simply create a system and process of how you will be tracking how much money you are spending, where you are spending this money, and what you are spending it on. Only after these steps are fully complete should you move on to the next stage of debt reduction process.
Negotiate Your Credit Card Interest and Repayments
Visit all the banks, people and institutions that you owe money to and negotiate better interest rates and lower monthly repayments. You may be surprised how flexible some of these banks and institutions are if you are honest in presenting your case about your current financial circumstances. Remember, that everything is negotiable for the smart and savvy person. Once you have negotiated down the lowest possible repayments and interest rates, you are then ready to move onto the next step of the debt reduction process.
Consolidate Your Debt
Take the lowest interest bearing credit card (including monthly repayments) you negotiated within the previous step, and identify the process you could take to consolidate your entire debt onto this card. Speak to your financial institution or bank as they may have low interest introductory credit card offers available when you transfer your debt over to them from another financial provider.
Live a Fulfilling Frugal Lifestyle
Again we touch upon the subject of frugality as it is one of the most important fundamental aspects of long-term financial wealth.
Here are a few more suggestions for living a frugal lifestyle that will at the same time assist you with reducing your levels of debt.
Create a Weekly Budget
Create a weekly budget and stick to it rain, hail or shine.
Become a Savvy Shopper
Become a savvy shopper who makes purchases based on price rather than on brand perception. Look for specials and negotiate better prices at every opportunity you get.
Once you have completed your discount shopping adventure, simply return home and spend some pleasurable time in the kitchen churning out a sumptuous home cooked meal that will wet the appetite. By cooking and eating from home you will effectively save at least half the money you would normally spend on eating out.
Make Purchases with Cash or Debit Card
Make purchases only using either a debit card or with pure hard cash. Get into the habit of keeping cash in your wallet and using only this money to make your purchases. By spending only what you have and nothing more, you will set yourself on track towards ridding yourself of your debt.
Eliminate Unnecessary Expenses
Eliminate all unnecessary expenses from your life. Unnecessary expenses simply don’t fall under the category of needs. Ask yourself before you purchase something:
Is this something that I need?Or is it something that I just want and can do without?
By being careful with what you spend your money on, and by following these simple guidelines, you will have more money at the end of the month left over to pay off the repayments owing on your credit cards and other liabilities.
Find Ways to Earn More
Simple, yet effective. There are always opportunities out there to make a little extra money that can go into paying off your debts. Look for these opportunities, however be very careful not to dip your feet into get rich quick schemes that ask you for a financial investment with a little time and effort.
If you are neck high in debt it is probably easier to look for a stable source of income that can guarantee you the highest possible hourly wage. Keep your eyes open and always add more value to what you do. In this way people will credit you for your work and as a result you may end up earning more in less time.
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