Getting into debt is usually a gradual process. We purchase a few things on credit fully intending to pay it back very soon. But buying on credit is so very easy so we buy more things before paying off the first things. Later on, often sooner than expected we find ourselves under a mountain of debt and life has become a little more stressful a little less fun.
Debt is money owed we can't pay back right away or payments that are running us even deeper into the ground. We've in a sense turned into a society that has gotten used to living on credit, which has put us in a mess. The first step has to do with attitude. Pay cash as you go. Not easy and maybe impossible to do in one big step but you've got to start trying. A very workable approach is just to start getting creative as to what you can do to save a bit here or a bit there.
Saving a bit here or a it there may probably won't decrease your debt at first. Prudent spending will slow and may even stop the downward spiral. More importantly, when you see things starting to "level out" you might just find you've suddenly inherited a "can-do" attitude towards debt reduction.
Take a good hard look at your bills. Write a budget. List everything you pay, even if you don't pay it every month. Add it up, and allow yourself a buffer - perhaps 10%? - on the bills that fluctuate like electricity. Eliminate what you can. Maybe you find it's cheaper the kill the cable and buy two movies for yourself every month.
Next are your loans. Make a list of all the loans you have, the outstanding balance, how many payments you have left, and the interest rate. Look at the two with the smallest balance. Which one has the higher interest rate? Throw all of your extra funds at that one first, that way you pay it off even faster.
Once loan #1 is paid, you now have that monthly payment AND all the extra from before that you can throw at #2. Keep going with this pattern of reducing debt until it is all gone. Once all of your loans are gone, you will have learned the habit of living inside of very tight means. You might suddenly have $900 extra every month, but you are used to living modestly.
You've finally paid of your debt. Now what? The rule here would be don't go out and buy yourself a congratulatory present, on credit? It's OK to celebrate, you deserve it, just don't go overboard. The next goals are to stay out of debt , save, and invest in your future. Watching your saving and investments grow is much more fun than watching your debt increase.
Think of savings and investments as paying yourself. You've certainly worked hard for it and when you work hard to get some money you tend to be more careful on what you spend it for. In this case it's those things which are really most important to you. A debt free life can be a very satisfying life and a satisfying stress free life may even lead to a longer one. - 15224
Debt is money owed we can't pay back right away or payments that are running us even deeper into the ground. We've in a sense turned into a society that has gotten used to living on credit, which has put us in a mess. The first step has to do with attitude. Pay cash as you go. Not easy and maybe impossible to do in one big step but you've got to start trying. A very workable approach is just to start getting creative as to what you can do to save a bit here or a bit there.
Saving a bit here or a it there may probably won't decrease your debt at first. Prudent spending will slow and may even stop the downward spiral. More importantly, when you see things starting to "level out" you might just find you've suddenly inherited a "can-do" attitude towards debt reduction.
Take a good hard look at your bills. Write a budget. List everything you pay, even if you don't pay it every month. Add it up, and allow yourself a buffer - perhaps 10%? - on the bills that fluctuate like electricity. Eliminate what you can. Maybe you find it's cheaper the kill the cable and buy two movies for yourself every month.
Next are your loans. Make a list of all the loans you have, the outstanding balance, how many payments you have left, and the interest rate. Look at the two with the smallest balance. Which one has the higher interest rate? Throw all of your extra funds at that one first, that way you pay it off even faster.
Once loan #1 is paid, you now have that monthly payment AND all the extra from before that you can throw at #2. Keep going with this pattern of reducing debt until it is all gone. Once all of your loans are gone, you will have learned the habit of living inside of very tight means. You might suddenly have $900 extra every month, but you are used to living modestly.
You've finally paid of your debt. Now what? The rule here would be don't go out and buy yourself a congratulatory present, on credit? It's OK to celebrate, you deserve it, just don't go overboard. The next goals are to stay out of debt , save, and invest in your future. Watching your saving and investments grow is much more fun than watching your debt increase.
Think of savings and investments as paying yourself. You've certainly worked hard for it and when you work hard to get some money you tend to be more careful on what you spend it for. In this case it's those things which are really most important to you. A debt free life can be a very satisfying life and a satisfying stress free life may even lead to a longer one. - 15224
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