Getting out of debt is a lot like losing weight. You have to decide to do it and commit to the process before anything good starts to happen.
One debt reduction strategy is known as "debt snowballing." Simply pay off the smallest debts first and then use the money you have left over to pay down the next biggest debt. This method works because you'll start making progress very quickly, which will help reinforce good habits. As you knock off each debt, you will have more money left over to pay down the larger ones. Another approach is to list your obligations in order of their interest rates, and put more money into paying off the debts with the highest interest rates first.
Regardless of which method you choose, the important thing is that you've decided to improve your financial situation. So, yay! Congrats on taking the first step.
Look on the bright side:
- Just think, paying off debts will give you more money to spend all over again!
- Managing your spending can't possibly be harder than being broke. It's all a matter of perspective.
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Tips from the trenches:
- Avoid payday loans like the plague. In fact, they ARE the plague.
- Put money into an emergency fund each month. You never know when you'll be out of a job.
- Avoid paying just the minimum amount due each month. This will let you pay the debt off in many fewer years.
- Pay yourself. As you eliminate each debt, put the same amount you were paying each month into your savings or IRA.
- Steer clear of those debt consolidators advertised on late-night TV.
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Survival kit contents:(replenish as often as needed)
- Life or Debt 2010: A New Path to Financial Freedom
- Debt-Free U: How I Paid for an Outstanding College Education
- Debt-Free Forever: Take Control of Your Money and Your Life
- Master Your Debt: Slash Your Monthly Payments and Become ...
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- Almighty Debt: A Black in America Special (DVD)
- In Debt We Trust (DVD)
- Repo Man (Collector's Edition DVD)
- Repo Men (DVD)
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- The Rolling Stones - You Can't Always Get What You Want -...
- ABBA - Money, Money, Money - MP3
- Pink Floyd - Money - MP3
- The O'Jays - For The Love Of Money (Apprentice Theme) - MP3
Words of Wisdom
Neither a borrower nor a lender be; for loan doth oft lose both itself and friend, and borrowing dulls the edge of husbandry. -William Shakespeare
Some debts are fun when you are acquiring them, but none are fun when you set about retiring them. -Ogden Nash