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Tips On How To Pay Down Your Debts

by Alice C. Woodhouse
November 26, 2009
Debts has weighed down so many dreams and futures. It's a shame how much time we are wasting and how much interest we're trying to pay off because we are putting it in the back burner and at the bottom of our list. People get college debt, from credit cards, and from loans. By putting off paying for it, we are going to be weighed down until it crushes us. Learn simple steps to gradually overcome this stressful situation with some tips on debt elimination:

Spend less than you earn

One of the recurring situation nowadays is how people lead a jet-setting lifestyle that they can't afford. It's important that you retain a positive money flow in your budget by maintaining a simple lifestyle and curbing your spending habits. If you have a high apartment rent, more payments to make than usual, an extra family member to feed, or things that require you to spend money on, do increase your income. There are now hundreds of people with part-time jobs or two to help them supplement their main income. There do get by on their day jobs, some have part-time jobs as waiter or tutor, and some do pizza deliveries during Friday and Saturday nights.

If you can, try to apply any frugal habits you are familiar with. Research the internet for frugal tips and advice that you think is practical enough to be applied. Sell stuff you don't need, read ideas about saving and work to learn more about managing your personal finances.

Stop making new debts.

When you're trying to pay off all your debt, stop using your credit cards for groceries, repairs, gas, or paying bills with. You can just see how it can easily spiral out of control when you don't keep a tight leash on your plastic and sporadic swiping.

Extreme debt elimination advice would be to cancel your credit card accounts, but some say to leave at least one for emergencies. It's important that you follow your instincts and do what you're comfortable with. If you opt not to cut up your cards, you should only get rid of those that have high interest rates. No matter if it gives you cash backs, vouchers, points or any promo, if it has high interest rates you're going to have more trouble paying for it while you're still paying down all other debts that you have.

Credit cards provide a safety net for those that don't have the money for everyday expenses, but it's also an easy way to get you deeper into debt. Try to make do with one credit card or with none at all. Stop any auto-renewals, those payments that automatically charges from your account.

Have and emergency fund when starting to paying down debts

Save at least 3-4 month's worth of income into a high-yeild savings account. There are experts that say you need at least $1,000 inside that account to help you when emergencies arise. Some people are unable to save the necessary emergency fund and thus rely on the credit cards that they kept.

It's crucial that when you're paying off your debt, you have to be able to cope with everyday expenses, as well as the unexpected ones. You never know when your washing machine breaks down, your tires need fixing, or some other payments that you need to take care of immediately. Try to remember that the emergency fund is only for real emergencies and not a resource to tap when you need to go out with your friends, buy a new shirt or have no money to order take-out.

Now that you have a solid foundation, pay off your debt with everything that you have. List all of your debts, each balance and interest. Try to figure out if you would plan to pay it off, choosing to pay the biggest one or the little ones first before you tackle anything big. It's all up to you. Read up on strategies that you're ready to use against your debt and decide your next step.

It's important to get rid of debt and get rid of it now. Or as soon as humanly possible. Stop all your stressing, your worrying and face your debts. Don't put it off like you've been doing for a long time, fight your debts and don't let it crush your life and your dreams.

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Tips On How To Pay Down Your Debts




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