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How To Stay Debt Free
You became an adult, you got a job, and you began to have adult responsibilities. As time went along, you found that you were unable to purchase all of the things you needed or wanted when you wanted them. The “buy now, pay later” concept, though not new, became a way for you to obtain some big ticket items such as cars and appliances, and, eventually, much smaller ticket items like clothes, video games, meals at restaurants, etc.. Then there were those emergencies, like a car repair, or repair of a broken window, a new lawn mower, etc. All of a sudden, you have 4-5 credit cards maxed out, a huge mortgage, two car payments, and a host of other monthly bills – too much for your income. Now, you are in trouble, and you are losing sleep trying to come up with a solution.
Consider the Elimination Process
Eliminating debt is truly a process – it takes a plan and specific intermediate steps within that plan until the goal is reached. The steps are as follows:
- Set your goals. Do you want to eliminate every debt you have, including your mortgage, as quickly as possible? Or do you just want to eliminate the credit card debt? How about any other revolving payments, like your car? Will these be included? No plan can be developed until you have your goal.
- Do some investigation. Do you have enough understanding of the world of credit and debt to develop your own plans and procedures or do you need a professional to assist you? If you do this yourself, obviously, there will be no additional charges and fees, but you might not be successful. If you hire a professional, there will be fees involved. Still another option is to purchase the kits that many debt elimination “gurus” sell. This will cost you a one-time fee, but you can then have the benefit of their knowledge, form letters, etc. Be careful in your research, however, because there are individuals touting their plans or experience who may not be totally “ethical.” You may end up purchasing services or kits which do little to eliminate your debt.
- The process may include lots of negotiation with your creditors, in an attempt to lower the total balances, for an agreed payoff amount. It may include a bill consolidation loan, into which you pool all of your revolving and credit card debt, affording one lower monthly payment. A home equity loan can be a good tool, because it is usually at a lower interest rate than a bill consolidation loan.
- Whatever you choose to do, commit to it. This takes time, patience, and the willingness to be persistent in negotiating with creditors and putting everything in writing. If you are not committed, don’t even begin the process. You will only frustrate yourself.
Understand that debt elimination requires self-control. You can’t eliminate one credit card debt and then start charging again. You have to sacrifice, you have to defer your gratification, you have to be willing to live economically until the debt is gone. Once it is, however, you have a freedom and peace of mind you never thought possible.
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