Eliminate Your Debt

Most adults today have a minimum of two credit cards, a car payment, a mortgage, and perhaps a host of other monthly bill obligations, such as student loans, personal loans, and home equity lines of credit. Average credit card debt per household actually is close to $10,000, and, with interest rates often exorbitant, most can look forward to a lifetime of debt, charging and borrowing more as it becomes available. Couple that with the hundreds of new credit offers in the mail daily and the temptation is to maximize the debt ceiling in order to enjoy life today and regret the expenditures tomorrow. We are a society of instant gratification, and that has lead many to foreclosure and bankruptcy.

Getting Debt Free

It is a tough decision to eliminate debt, and with this tough decision comes sacrifice, lots of it! There is a process to follow to eliminate debt all by oneself, if the organization and the self-discipline are there. It requires commitment, constant reminders of the goal, and then the ability to translate the commitment and goal into action.

Begin by eliminating all expenditures which are not absolute life essentials. This means that you buy groceries, gas, pay your mortgage and utility bills, insurance and medical payments, and purchase clothing and personal hygiene items only when absolutely necessary. The remainder of your money needs to be spent to pay down your debt, usually beginning with the lowest debt first. Once that debt is paid off, you take all of the money you were using to pay that debt and dump it into the monthly payment on the next debt. Continue to do this until you have your debts paid off. This may take from 3-5 years, depending upon the amount of debt you have, but it is wonderful to see how rapidly a loan balance goes down when you make more than the minimum payments. Once all credit card and other debt is paid off, you can double your mortgage payments, getting it paid off in half the time. During this time, you will also be able to afford some luxuries and entertainment which will make it all worthwhile, but remember you will be paying cash for these items, not using your credit cards. Another important reminder is not to close your credit card accounts once they reach a zero balance. You want to keep a couple of accounts open so that your credit rating remains excellent. Every once in a while, charge $50 or $100 on one of the cards and then pay the entire balance when the bill comes in. This pops that credit score nicely.

No Self-Discipline?

If you cannot do this on your own, you need to find a debt relief, consolidation or elimination professional who will guide you through the process. There will be fees involved, even if it is only purchasing the materials for a self-study course to do this on your own. Be careful in your selection you want to find someone you trust and who is willing to aggressively negotiate with your creditors for the best deal possible. Fees are negotiable, as well, because they want you to choose them over the competition. Don't be afraid to bargain a bit.

Getting debt free is a wonderful goal. If you can get there and remain there for life, you will be able to enjoy untold leisure activities, retire early, and have the money to do the things you want.