Self Help – Debt Reduction Solutions

Highly indebted people know what it’s like to ask Bill Collectors to assist you at any time of the day, send notifications after receiving a notification, call, visit, and sometimes even harass. This is a huge burden that will cause you to default on bills and drain your finances.

Today it is a huge problem to become debt-free. Anyway, debt consolidation companies advertise on TV, radio, and newspapers. These companies claim the miracle of reducing someone’s debt from $ 100,000 to $ 3,000. Indeed, some methods can solve problems for people, but in fact, more than any other “practical” method, you can completely get rid of the smoking and mirroring strategies of the debt work they do for you. Most of the time, they add your debt to the service charge, and even if they help you get rid of your original debt, it is a percentage of the total debt.

These companies can certainly deal with collectors when they arrive, help you, and get you out of trouble, but honestly, most of the work they do for you is easily done by yourself. In some cases, you need a third party to negotiate, but this is like a lawyer. In this case, he can help you avoid paying such ridiculous fees for debt consolidation. The best option is to find a legal not-for-profit debt reduction company and learn how to do it yourself because, as I said, most of the things that these debt consolidation companies do for you, you can easily do yourself. It will certainly be cheaper, and you might learn one or two about how to better manage finances later in life.

This is the best secret to get rid of debt, which has served hundreds of people successfully. Pick and choose the one that suits you best …

Write down your financial goals.

If you don’t write it down, you can’t achieve a great goal. Type it, print it in large font, and stick it on the fridge. What is your goal? Reduce your debt by 50%? Eliminate debts within two years? Whatever it is, be specific and write it down, don’t forget.

Create rewards.

People who are good at achieving a goal will tell you that rewards are important. Try to indulge yourself regularly or rarely celebrate when paying off debt. Let them motivate you to succeed.

Think positive.

This is probably one of the most important tips on this list. Positive thinking sounds clichĂ©, but trust me, it works. In fact, this is essential for eliminating debt. If you let negative thoughts come to mind, it will make you want to give it up. Getting rid of debt is a long-term goal, and it’s important not to give up. If you feel like you are thinking about negative thoughts, suppress them, and replace them with positive thoughts.

As the saying goes, stop digging if you want to get out of trouble, stop digging. Most importantly, it would help if you stopped using your credit card to make purchases and slow down consumption to avoid debt. Must buy things, but not money. You must first find money, or wait until you have money, instead of using credit.

Make a list of debts.

For many people, this is a difficult but essential step. If you want to solve the debt problem, you need to know what it looks like. List all debts, their minimum monthly payments, interest rates, and the total amount owed. Spreadsheets can solve this problem well. Then add up the monthly payment and the total amount due to see how much the loss was. Now that you have a solid understanding of debts, you can start developing a plan to resolve them.

Lower your costs.

See which measures you can take immediately to save costs, such as reducing the purchase of coffee (make your own), eating out (cooking at home) or shopping (just stopping), or whether you want to save large costs—bills, such as payment for a second car or your yacht. If you can cut costs, even a few hundred dollars a month, then you can use the money to pay off debt. No matter how much you save from expenses, pay the extra debt (see Debt Snow Ball below).

Earn extra money.

In addition to reducing costs, you should also see if you can bring in some extra income. Work part-time, do some freelance work, sell some of your stuff on eBay, hold garage auctions, rent boarders, rent yachts. Be creative. It’s not necessarily permanent, but even if you’re not in debt, you can still decide to keep increasing your extra income.

Create a simple budget.

This is another step that many people fear. Well, it doesn’t have to be too complicated. List your monthly expenses, including minimum debt. Write down what you spent on each item (be realistic). Total. Then add up your income to see if the income exceeds the expenses. If not, you need to cut costs.

Pay attention to unconventional expenses.

Plan ahead of time for possible expenses such as Christmas and birthdays, insurance or home repairs or car repairs, or back-to-school shopping. These are not the things that happen every month, but they do happen. Budget for them and save a little so you can be prepared. It is best to include a small amount of such incidental expenses in your monthly budget so that you have money when you need it.

Save emergency funds.

The tip may seem strange in the list of tips to get rid of debt, but it is actually essential. Without at least a small emergency fund, it will be difficult for you to get rid of your debt. The reason is that when unexpected expenses do arise (and always are) if you don’t have emergency funds, the first thing you want to reduce is debt settlement payments so you can cover the unexpected expenses. Do this, or you use a credit card and owe even more debt. Try to save $ 1,000 in your savings account to cover these unexpected expenses and keep your debt resolution work running smoothly. Once you collect the $ 1,000, it will all be used to repay the debt.

Stop using credit cards.

Many of us have questions about credit cards. If you’re the type to pay your balance in full every month and don’t carry credit card debt, you can skip this prompt. If you don’t pay the balance in full, cut or hide your card and stop using it. Interest is very high; using credit cards is too easy.

Use cash.

Instead of spending all the expenses on the card, try something green. On each payday, get the amount of cash needed to spend on the simple budget you created (see above). Pay the bill online first and then withdraw money for groceries, gas, and other expenses. If you have no more money, you have no money. It’s that simple.

Use debt to snowball.

Debt Snowball promoted by financial advisor Dave Ramsey (Dave Ramsey) is a simple method for many people. First, make sure that at least $ 100 can be used as a “debt snowball.” Use this amount to increase your minimum debt payment while paying off other minimum debts. Your smallest debt will soon be paid off. Now take the total amount you paid for the debt (the amount of the “debt snowball” plus the minimum payment for that debt) and use it as the next minimum amount for the debt snowball. Keep doing this, and as your debts are paid off, your debt will gradually increase until all debts are paid off. Another strategy (and a popular one) is to pay off the highest interest debt first, which will save you some interest.

The minimum requirements are executed automatically.

Ensure that the minimum payment for each debt automatically reaches the maximum level, so you don’t even have to factor those debts into account. Allow businesses to automatically debit your account or use the online invoice payment feature to automatically recurring payments.

Make an account of debt, eliminating payments.

In addition to the minimum payment, the additional payment you make for one of the debts (see Debt Snowball tips above) should be considered an invoice and not an optional fee. This means that you have to pay the debt cancellation payment along with other bills when you pay a bill. Could you not make it optional at all?

Get a lower price.

Find a balance transfer for your credit card, which will lower your interest rate (read the fine print carefully), or make a plan with your current credit card company to lower the interest rate. If you tell the credit card company that you are turning to competitors with lower interest rates, many credit card companies are willing to cut interest rates.

Keep an eye on the impulse to spend on impulse. Impulsive spending is the main culprit that causes us to fall into debt, and while we like to get out of debt, we often stick with it. Learn to follow your impulses so that you are aware of them and can control them. When you want to buy something, your heart usually starts beating faster, and your breathing becomes heavier. If you can overcome these impulses, you can control your spending.

Use the checklist for 30 days.

A great tool for controlling impulse buying is to use and stick to the 30-day checklist. When you want to buy something unnecessary (use “necessary” to denote messages, not the latest gadget or something), write the date on the list and the list. Then I will not allow myself to buy it before 30 days have passed. Usually, the desire or need to buy the item disappears.

Stop shopping and don’t go to malls or other usual shopping areas.

Do not go to “shop” places – only go to the shop if you have something specific to buy (not need) and do not buy other things. Go in and then go out.

Do not buy online either.

Shopping is suitable for online shopping sites, such as Amazon or eBay. Buying online is so easy that many of us often do it without knowing how much we are actually spending. If possible, stay away from these sites.

Eat at home.

If you eat out often, try to cook for yourself. Create a menu of your favorite foods that are easy to prepare each week, list the ingredients you will need, buy them, and cook simple meals every day. It’s okay to eat out every once in a while, but if you can lower the costs of eating out, you can usually set aside a lot of money to get rid of debt.

Stay focused.

One of the hardest things about achieving long-term goals (such as eliminating debt) is that our focus on this goal is gradually disappearing. Focus is the key to achieving any goal. To achieve long-term goals, you need to find a way to stay focused. Having a partner to pay off debt or join an online forum is a good way to post your goal or a photo of your goal in a visible place. Also, keep a debt journal or send yourself an email reminder. Do everything you can.

Exit the swinging room.

It is unwise to get rid of all surplus expenditure and use all expenditure to clear debts. That is the secret of a disaster. You have to give yourself some pocket money to eat or buy things from time to time (but much less than before). Otherwise, you will start to feel deprived and eventually give up.

Brown bag.

If you eat a lot of things for lunch, try packing lunch and eating at work. This can save a lot of money in a month. It has to buy things for lunch and take some time to pack in the morning (or the night before), but it’s worth the extra effort. Bonus: healthier overall.

Look for free entertainment.

Entertainment is another expense that can really hurt your debt-clearing efforts. In most cases, these costs can be significantly reduced. Don’t go shopping at night, go to bars, go to the movies, or do entertainment that costs money, but look for free (or at least cheap) entertainment. Staying at home and reading, doing fun things at home, going to the park, exercising, and spending time with family or friends can all be a lot of fun without spending a lot of money.

Cut big expenses.

If you double-check and think about it, you can usually save many costs such as housing and car expenses. Of course, lowering these costs isn’t as easy as buying a morning latte, but they can make a big difference and are well worth the effort. For example, housing costs should not exceed 33% of family income (as a general guideline, of course), including mortgages, property taxes, and property and homeowners insurance. Search around to cut insurance rates, refinance mortgage loans, or find ways to cut energy costs.

Looking for bargains.

Some people are born to be bargain hunters, while the rest of us need to learn skills. When you want to buy an item, take the time to research, find the best price, look for sales opportunities, and even ask for discounts. If you can negotiate, you can cut costs a lot.

First, find free or second-hand items.

You don’t have to buy something when you need it, to see if you can find someone else who owns the item but doesn’t need it. Please send emails to friends and family to let them know what you need. Or check out or If you can’t find it for free, try to find a second-hand version of it at a low price from garage sales, second-hand stores, eBay, and other sites.

No-fault? Save and then spend money.

When your debt is finally paid off, save 60% of your payment and enjoy the other 40% of the debt. This will make you feel free from debt while saving other goals.

Educate yourself.

If you want to solve problems such as debt, it is best to arm yourself with information. Do some research on the Internet, read “Your Money or Life,” read Dave Ramsey. Go to the library instead of buying these books.
Be creative. Getting what you need without spending a lot of money is an art form. It can be done with a little imagination and creativity. Find new ways to meet your needs without spending a lot of money. This can even be interesting.

Spend 60% of your income.

A good guideline used by many people is to make your necessary monthly expenses, only 60% of your total income. Divide the remaining 40% into savings, debt repayments, and expenses.

Be patient.

Eliminating debt is not an overnight matter. You will not be in debt in a month, and you will not be off your debt in a month. For many people, it can take several years. While you may be passionate about getting rid of debt and want to do it immediately, keep in mind that you’ve been in this state for a long time. Now adjust to the new lifestyle and get out of debt.

Lots of fun.

If you totally hate the new austere lifestyle, you won’t last long. Learn to enjoy, enjoy the frugal way, and reward yourself for getting rid of debt. You are more likely to stay in it for life.

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