Reduce Your Debt to Zero

In this weak economy, the use of disposable income being used to pay debt is at a historic high. But you can de-stress your way out of debt. Here are eight stress-free ways to get out of the debt trap fast!

1. Enlist your family. Enlist the support of your family to honestly assess your debt crisis, and pro-actively participate in a plan to reduce all unnecessary spending. Start closing charge accounts. Stop using credit cards unless it’s for an emergency. Be blunt. For example, ask your child if it is more important to get an iPod or have a roof over his head.

2. Be honest with creditors. Don’t avoid those incoming telephone calls. Be honest. Be blunt. A client who received no help when he first talked to creditors re-called them later to say he was considering bankruptcy. That magic word was all it took for most of his creditors to immediately reduce interest rates and arrange a longer-term plan of repayment.

3. Plan your to match your income. Erase all thoughts of impulse buys. Write everything you need (and want) on a piece of paper and do the math before you make a decision. These are tough times, so be tough with your budget.

4. Consult a consumer credit counseling service. They now exist in every state, in every large city and in most or near smaller communities. Even if you decide not to attend classes, visit the Web sites of these services, since many contain free debt reduction tips you can read or download. Share what you learn with family members or roommates.

5. Create a debt repayment plan on paper. List debts in one column and repayment plans in another. Add a third column for disposable income, and a fourth to list necessities such as food. Don’t just think about your debt. Make a plan on paper, and stick to it.

6. Revisit and revise your plan. Revisit your plan at least once every 30 or 60 days to make any necessary revisions. Once you get used to cutting out extras and making each dollar county, it will become a habit. Stay out of the debt trap by making it a lifetime habit.
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7. Practice patience. Getting out of debt comes with no quick fixes. Tell yourself to be patient. When you start to panic, breathe deeply, and tell yourself to be patient. Breathe deeply again, and mentally envision releasing that panic as you exhale. Do this exercise as many times as it takes to allow yourself to relax.

8. Simplify your life. Stress can rob you of the pleasure that you think will come with spending extra on vacations or personal items, especially when that spending only exacerbates your debt. Stress also leads to serious health problems, and there is no faster-rising expense than health care. Be smart. Simplify. Your reward will be a less stressful, happier life.

Being in debt is stress filled and keeps you in the debt trap. Getting out of debt through using these common sense techniques will help you keep your disposable income for happier things.