Top Ten List for Eliminating Debt

There are a lot of reasons that people end up in debt. Unfortunately, for most, the reason seems to be overspending and a disorganized or absent system to manage money. In many cases its several factors combined. Of course, there are unplanned circumstances that can also cause debt. Job loss, and other factors. It doesn't matter what the cause of the debt was, the important thing is to get rid of the debt.

Here is the top ten list for eliminating your debt. Sometimes it isn't easy to stay on track". But it is vital that you use this list as a guide. This list of 10 rules will give you the guidelines for eliminating your debt, and staying out.

1. Make a budget. Put all of your income and expense down on paper where you can see it. You have to see it in front of you for it to work. If your income is less than your expenses, you need to make more or spend less - it's that simple. If your total bills and expenses are more than 90% of your income, you will need to make some changes.

2. Ever hear of the "debt snowball"?. If you have a little cash and can afford to make a lump sum payment on your cards, pay them to below 50 percent of the card limit. This will increase your credit score. If you cant, then just begin to use the payment snowball system to pay off your cards beginning with the highest interest rate card. Destroy the cards and eliminate the temptation to spend.

3. Use REAL money! If you must keep a card, keep one with a low interest rate and a low limit.. Don't carry your emergency card with you. It isnt real money. If you need a new refrigerator or an emergency car repair use it. Even if you use the card for emergencies, pay it off in 3 months max. If you have some savings, use it to buy the refrigerator and don't use the charge card.

4. Use direct deposit for you paychecks, and have a limit on what you can withdraw for personal use each week.

5. Commit yourself to eliminate unnecessary expenses and purchases. Subscriptions, dining out, anywhere you can cut your expenses improves your situation.

6. Your home and housing expense should total less than 33 percent of your total household income. Talk to your insurance agent and see if you can reduce your mortgage insurance. Try to get a lower interest rate on your mortgage - be clear about the terms of your mortgage. Despite what the slime ball predator on the other side of the desk tells you, you can't get an 800K mortgage for $1250 a month. Logical really, but obviously many people missed this concept and were sold inappropriate loans. Go online and use a mortgage calculator to determine what your real, actual, fixed monthly payment is at the interest rate you want. If that amount is more than you can easily afford, then you may need to get an extra job. Also, some utility companies offer more economical utility plans. Check with your local utility provider.

7. Debt consolidation loans are a trap. That means any consolidation loan, or consolidation program. If you don't heed this advise, be very cautious. make sure that the total loan payment is actually less than you are paying on all your debts separately. If its cheaper and at a lower interest rate than the cards, you can make it work. It's playing with fire. The debt isn't gone. You have just pledged your home as collateral for it, where before it was just unsecured debt! Not paying your credit card gets you a ding on your credit.Not paying your mortgage leaves you without a house. Be very careful!

8. Stay in contact with your creditors. Tell them your situation and get them to reduce your interest rate. Some will eliminate the interest rate in favor of a debt payoff plan. They don't want to use a collection agency, so you really have the upper hand in negotiation.

9. Shop better. Clip coupons. Try negotiating with the store for a better price when you make a large purchase. Strike a bargain, they are in business to sell. Don't buy on impulse. Know what prices are elsewhere. If you find a better deal somewhere else, let the salesman know. See if they can beat the price.

10. If you have the option, work some overtime now and then. Use the extra money to eliminate the debt. If your job does not offer any opportunities for overtime, think about a small home business, or finding a part time job. Keep your eyes open and opportunities will turn up.

If you dont think you can do this on your own, bankruptcy is probably still not the solution. It will leave you in financial ruin for at least 10 years. There are other options. If you can't negotiate yourself, find a company who can do it for you. Many of these firms are just rip offs, so be cautious. Some of them charge as much as 20% of the amount that they settle as a fee. If you owe $20,000 in credit card debt, you would have to pay 4 thousand to them as their fee. Don't pay them for something that you can do yourself with a little education Look for a good deal when your ready to eliminate your debt.