If you find yourself facing massive amounts of debt or are just tired of paying interest to the credit card companies each month, you should consider using some simple debt elimination tactics that can help you get your finances under control. Over the past decade, credit card debt has reached record proportions and many people find themselves paying a significant portion of their income towards their credit card bills. The interest paid on these accounts has helped the credit card companies post record profits quarter after quarter. Instead of using your income to pay the multi-million dollar salaries of banking executives, use these debt elimination tactics to pay off these accounts and avoid creating new debt in the future.
Know How Much You Owe
It will be very difficult to pay off your debt if you do not know how much you ultimately owe to your creditors. Some people blindly throw money at the problem, hoping that they are doing some good but not really having a plan for success. To begin, make a list of all of your debts, including credit card balances, loan amounts, and large bills paid in installments. This will show you the total amount that you owe and allow you to create a plan for repaying the debts while maintaining an acceptable quality of life.
Reduce Your Spending
If you are trying to eliminate your debt, the last thing that you want to be doing is creating more debt. Reduce your spending to the minimum amount that it will take to continue living comfortably and put all the money that you are no longer spending towards paying down your debt. If you find it hard to resist temptation, which is increasingly difficult to do in today’s environment of constant bombardment by advertisements, take steps to limit your temptation. Unsubscribe from daily deal sites, toss catalogs into the garbage unread, and mute commercials on television. You will be thankful that you did when you see your debt balances begin to shrink.
Find A Way To Raise Additional Money
If you are still finding it hard to make a dent in your debt balances, you may need to find some additional money that you can put towards the problem. There are a number of ways that you can accomplish this. Some people choose to put in more hours at work or take a part time job so that the additional income can be used to pay down debts. Other people choose to sell things that they do not need, do odd jobs for family members or neighbors, or find a way for a hobby to become an additional income stream to provide more cash to put toward debt elimination. The faster you can pay down your debts, the less you will pay in interest charges and financing fees and the faster you will be able to begin building wealth for the future.
Join our newsletter
Subscribe to get the latest "Engineer Your Finances" content via email.