Credit Card Debt Solutions

Making a Dent In You Debt

July 8th, 2009 Subscribe To Our Feed

Debt is the curse of our time. The amount we owe would make our ancestors’ heads spin. For some their income can cover the repayments. For others their income is simply insufficient to meet all the outgoing expenses and their debts are rising to even more unsustainable levels.

The Current Economy

The current world financial woes have just heightened the problem and raised the spectra of collapsing economies and the resultant pain and poverty that will inevitably follow. There is no time to be lost. You simply have to set your house in order.

How To Start

First, grab all the family credit cards and lock them away or destroy them as they make it way too easy to get into trouble. Next make a complete list of all your debts. Put them in order of amount borrowed and by the highest interest rate charges. Determine the lowest amount that is required to be paid collectively each month.

Fixed Expenses

Now you need to work out your new budget. List all your monthly expenditures. Do not forget to make a monthly allowance for those periodic payments like rates and insurances. Go through the budget and delete all unnecessary items like membership subscriptions and cable TV subscriptions. Delete everything that is not necessary to everyday living. If there is money left over after this analysis you can look at reinstating those things again later on.

Comparison Time

Now work out outgoing compared to income. Hopefully, this will now show a surplus. If this proves to be the case use this surplus to commence paying off the debt with the highest interest rate. Get the first one paid off and then work on the one with the next highest debt. You will now have a higher surplus each month so maybe you can reward yourself with reinstating cable TV or the gym membership, but take it slowly.

More Analyses

If, after doing your budget you are still behind the eight ball you will need to look at reorganizing your debt into one single loan at a better over all interest rate. Shop around to find the best deal. This may prove difficult but keep trying. If all else fails, try getting a better job that pays more or look at moonlighting in a part time job. Maybe you could live with relatives until you get back on your feet.

Start and Stay Committed

There are always alternatives but you must make a start on killing off the debt. Nothing will improve if you do not take action. Remember to break the credit card habit and write out and commit to a budget.