Eliminating Debt

In order to become debt free you must be able to exercise self discipline and learn to control your spending. A lack of discipline and control over one’s spending is the greatest reason for high debt in the first place.

Many people try getting out of debt by refinancing their home or getting a second mortgage or line of credit. These are great temporary ploys but really do not help in the long run. If you refinance your home for a longer term than the notes you are paying it is actually going to cost you more. In other words, lower your payments for a longer term saves you nothing.

Some of us even try getting a second job. This is good if you can do it without causing yourself any undue stress related health problems. A part time job with the extra money going toward your current debt will help immensely . This is not something most of us can do because there are problems that can arise in this situation that will actually create more debt.

The best way to get out of debt as I have said is control and self-discipline. Start with the basics and I do mean the basics. Why eat out? It costs less to eat at home and for lunch at work pack a sandwich or whatever you like. It is cheaper to brown bag your food than to eat out at a fast food restaurant.

Try cutting out any unnecessary costs in your budget. You can do this by using your cell phone less, stop the subscription to the premium channels on your cable or satellite network, cut out either the cell phone or the home phone subscription. These are just a few examples of getting back to the basics there are more you can do and this is where control plays a part in your decision to be debt free.

Exercising self discipline gets a little tougher. This is where you have to give up much of your wants at least for awhile. If you have more than one credit card you need to start canceling accounts or if you have a balance you need to stop using your cards. If you want something you can buy with something called cash. Yes, it still buys merchandise. It is not only used for paying debt to others. It is preferred to keep only one card for emergency use and get rid of the rest. Do not keep the one with the largest limit either. This could cause you to use the card for frivolous items rather than just emergencies.

Next you have to set your budget and live by it. It needs to be strictly adhered to. When you make your budget you of course schedule in all of your payments as well as expenses for the home. When this is done you will have some free money. This free money no matter how small of an amount is what is going to get you debt free.

Find the highest interest creditor you have and pace this free money on that account each payday. As well as still paying the payment you have in your budget for that account. Once that account is satisfied go to the next and keep going until you have satisfied all of your debt. Paying a debt is the only way to become debt free.

It is possible to negotiate with some creditors and get a payoff balance somewhat lower than the amount owed. This however can be looked on negatively should you ever need credit again. No one said it would be easy getting out of debt and neither should it be. We created it lets don’t leave it for others if possible.

Once you follow this plan religiously you will begin eliminating debt and have more free money. All of this money should keep applying to your debt. After the fact you can reap the rewards and buy what you want with cash.

Controlling our purchasing habits and saving money is the two mistakes we make to get us into debt. Breaking these habits, taking control, and not overspending our budget will keep you and everyone else debt free.

Once you become debt free start putting money in some type of investment and watch the interest you ere paying start coming home to you. Of course for the most part your investment will receive less interest than you were paying others but this way it is all yours.

If all else fails and you really can not pay your debt then bankruptcy may be in your future. No one wants to really consider this option but sometimes it is necessary. If this happens to be the case you will still need to learn control and self-discipline so as not to get in debt again.

It will do you no good to become debt free if you still have the mindset to spend-spend-spend. Keep it to the necessities and what you can pay cash for.