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Reduce your debt one step at a time
Despite what those late night television commercials may tell you, there is no quick or cheap solution to getting out of debt. The companies that are promising to reduce your debt are actually only interested in increasing your debt -to them. What you need to do if you have too many bills and owe too much is to pay if off. It won’t be easy and it won’t be quick. The results will be worthwhile, however.
Read on.
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Simple tips for reducing your debt
The average American household has five figures worth of credit card debt. It didn’t come overnight; it came through years of not paying attention. That being the case, it isn’t going to go away immediately, either. You can reduce your bills by paying them off, one at a time. Where will the money come from? You will have to find it. It may not be as difficult as you think.
Here are some suggestions as to how you might get your finances in order when you feel overwhelmed:
- Work more. Take an extra job. Is overtime available? If you’re not making enough money, then you need to find a way to earn more. Can you find a better paying job? A part time weekend job? Do what it takes. Your reward will be going back to a normal work lifestyle after the bills are paid off.
- Take your lunch - It’s amazing how much money you can spend in a month if you eat lunch out every day or buy a triple latte at a coffee shop. Brew it up at home, take it with you and pack a sack lunch while you’re at it. The amount you save will make a nice credit card payment.
- Stop using the credit cards - This one should be obvious, but you need to stop using the plastic and use cash or a debit card instead. Watch out for debit cards; they may allow you to overdraw your bank account and that could add hefty fees to your bank statement.
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- Adjust your paycheck - If you got a tax refund this year, then you had too much tax withheld from your paycheck. Talk to your payroll department at work and arrange to have the correct amount taken out of your pay. Once you do that, spend the extra take home pay on your bills.
- Make a budget - See how much money you take in and how much you spend each month. Analyze exactly where the money is going and see what you can eliminate from your monthly expenses. Perhaps a few months without HBO would help you pay off a credit card. You never know unless you look.
- Sort your bills according to the amount you owe and the interest rate - You may wish to pay off the loans with the highest interest rate first. Or you may want to pay off the one with the smallest balance first. Find a system and stick to it. If you pay off a bill, put that money towards another one next month.
Paying bills requires discipline and patience. You didn’t get into debt overnight; you won’t get out overnight;, either. It takes time. That’s OK; you have time. You just need to get after it. Once you pay off one bill, it gets easier and you become more eager to pay off others.
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