Debt. Everyone hates it, but everyone has it. Credit card debts are the worst of them all. That revolving door of credit never seems to stop spinning. There is, however, a light at the end of the credit tunnel. Imagine not having to screen phone calls to avoid talking to those pushy credit collectors anymore or not having to hide out in the kitchen because the repo man is knocking on your door. In five easy steps you can be well on your way toward a positive cash flow.
Step 1 : Cut up those credit cards. All of them. Don’t keep one just in case of emergencies or convince yourself that you can be a good little spender. Just get out the kitchen scissors and chop them into as many pieces as humanly possible. These little plastic demons are far too tempting and you cannot get rid of your debts if you continue to accumulate them.
Step 2 : Debt consolidation. This is the BEST way to pay off your unsecured debts. It takes all your unsecured debts and rolls them into one debt. And one debt means only one monthly payment. One highly recommended debt consolidation service is debtliberty. They have helped thousands of customers reduce their debt by up to 70% in up to 24 months. They offer a free consultation so you have nothing to lose, but everything to gain.
Step 3 : Always make at least the minimum monthly payment. This may seem blindingly obvious, but it would be very easy for that light at the end of the tunnel to be the 7:10 debt express if you don’t. Making the minimum monthly payment ensures that at the very least your debt will be paid in the allocated time.
Step 4 : Work out a budget. Sit down and really think about everything you spend money on each month. Rent/ mortgage, utilities, travel, groceries, school fees, medical insurance everything that you’re paying out. If you’re paying it yearly, divide the yearly payment by 12 to get the monthly cost. Work out where cut back could be made. For example, taking your lunch to work with you instead of buying, do a bit of online research to see if you can find cheaper insurance for yourself, your car or your home and looking into the cost of public transportation to and from work. It’s not as convenient, but it can save you money in the long run. Also be very careful not to fall into the trap of underestimating. It’s always best to overestimate how much your grocery or utility bills will be. A budget helps to keep countries running smoothly; your own personal one will have the same effect, but on a smaller scale.
Step 5 : Open a savings account. At the end of each month halve what money you have left. Put half into a saving account for a rainy day and the other half down as an extra payment on your debt. Any extra money you pay into your debt will reduce the amount of interest you have to pay, so you will end up paying off your debt quicker and cheaper than if you just stick to minimum payments.