5 Tips For Handling Debt
If you believe you’d like 2012 to be the year you take control of your life, the very first thing you should consider would be to set an objective in the New Year to get out of debt for good, and stay out. Perhaps that means consolidating credit card debt into one payment, paying off the loans one at a time, or liquidating things you know you do not need. Regardless, below are some suggestions to help you you begin:
1.) Power Starts With Knowledge. First, understand exactly what you owe on your present debts. Jot them down in order of balance due. This doesn’t have to be anything fancy, you can simply create a spreadsheet with columns of the debt name, sum owing, IR that you are paying, and minimum sum due each month to keep it current.
2.) Write Down Time To Payoff. It you continue paying off your dues at the rate you're now, how long will it be until they're paid off? It can serve as incentive to be completely clear about how long this can take, and it’s usually surprising to many of us how fast the debt can pile up, and how long it needs to pay back.
3.) Start Paying It Down . Pick one debt and begin paying as much extra on the minimum as you can afford every month. A few people will begin by paying off the credit card or debt with the highest rate of interest, but some financial consultants advocate that we start by paying down the debt with the tiniest balance, then rolling that payment into the next balance once it’s paid off. Decide what’s right for you.
4.) Think about whether you can truly afford your mortgage?” If you have had a change in your circumstances, eg a decrease in earnings or a sickness that's making it difficult to stay abreast of your mortgage payments, call your mortgage company.
Some mortgage firms offer what’s called a mortgage modification plan. This modification simply means you may qualify to have the details of your original loan reworked – leading to a decreased interest rate and reduced regular payments.
You may also decide to change your housing arrangement by downsizing into something more within your means. It does not need to last forever, just until you can get back to a good financial situation.
5.) Pay attention to your bills. Do you pay your cell phone bill without taking a look at it? Sounds simple enough, but a few people pile bills unopened and just settle up without ever going over the bill itself.
It isn’t unusual to find that you have been overcharged, in many cases repeatedly. Would you not wish to keep your cash in your pocket rather than send it to your cell phone company (sure you would).
6.) Put something in savings every payday. Even if it’s only $20.
It’s important to pay yourself first, in whatever amount you are able to afford. Making saving a habit is important, and you'll be amazed by how the account will grow over time.
Outline
You can get your debt under control just by paying atttention to what's going on and working toward paying it off a little at a time. Don’t let yourself see the situation as hopeless. There’s help available if you feel lost, confused or exasperated.
Mike Warren writes about subjects related to goal setting and personal development, and maintains a website dedicated to the topic at Achieving Personal Goals. When not writing about personal development, he enjoys his own fitness pursuits, aviation and playing golf.
