The job of managing your debt can be made very easy to accomplish by following a few simple rules and guidelines.
Rule Number One: Don't try to restructure your entire financial plan in one day.
Remember, it most likely took years to get to this point that you are at, so do not expect to be debt free overnight.
Instead, try to think of this as you would a weight loss plan.
Use small, deliberate actions to arrive at a predictable outcome.
Which in this case, will be being in complete control of your finances.
Rule Number Two: Make sure to keep from becoming strapped for cash.
You will need to have a cushion for some family entertainment, such as going to the movies, a reasonably priced dinner, or maybe a sporting event.
Not every night mind you, once a month would be fine.
Rule Number Three: Above all, the bills must be paid first.
No robbing Peter to pay Paul.
One way that this can be accomplished, is by listing all of your monthly net income.
and alternately listing all of your monthly expenses to see just where you stand, and what steps you need to take to reach your goal.
There are many ways to reduce your debt, but we'll concentrate on some with the most impact.
Topping the list could be a mortgage payment for some.
At what interest rate did you lock in at, and what is the going rate now in your area? Could you re finance at a better rate and reduce your monthly payment? Next on the list might be a car payment or a high interest credit card payment.
If you have a large balance on a credit card that is smothering you, this needs to be addressed first.
There are many possible solutions to this, some of which could be, a home equity loan, a debt consolidation loan, or maybe we should take a look into our auto loan.
Its possible that if you are paying a sizable car payment, you may need to think about trading down to a vehicle that you can own with no payment, and increase the amount paid to the credit card.
This may not be a popular suggestion with some people, as we tend to have strong feelings about our cars, however I only suggest this because I have gone this route myself, and it works very well.
So well in fact, that I wast able to upgrade my ride in just a couple of years.
This article is meant to get you thinking in the right terms of debt reduction.
This is only a small sampling of what we can do to bring about a positive change.
In coming articles, I will be digging deeper into methods and resources with some more strategies that I have used personally to become debt free.