Ways to Reduce Debt
Debt happens to all of us.
How you handle it afterward is a different story.
Whether debt is from excessive shopping, a job layoff, an unexpected expense, it has to be paid for.
There are different ways to handle this.
Essentially, you owe more than you make.
So you either need to decrease your spending, or increase your income.
For more income, you can get a second job, work odd and end jobs, etc, or you can take steps to help pay down the debt faster.
Call your creditors - Call your creditors and see what you can do to help make the debt go away faster.
You'll be amazed how often they are willing to make a payment plan, especially if you have been making regular payments and trying.
They would rather get their money over a time period than not at all.
A payment plan has to be reasonable, $10 a month on a $1000 debt is not reasonable.
If you cannot get satisfaction from the first person you speak to, ask to speak to a supervisor.
Get your interest rate lowered - Is your debt credit card debt? Have you always made your minimum payments on time? If so, you are considered a good customer.
Call the company and see if they can lower your interest rate.
It never hurts to try.
Snowball your debt - This is an idea from Dave Ramsey.
Lets say you have two debts, one for $1,000 (Debt A) and one for $10,000 (Debt B).
You pay the minimum on both, and then put any extra money you have onto the smallest debt, the $1,000.
Once that is paid off, you take the minimum you were paying on Debt A and apply it to Debt B, including the minimum for that.
Cut Spending - See what you can decrease - internet, TV, cell phone, you don't have to cancel these items, but see if you can decrease all the services you get with them.
Maybe you cut out how often you go out for dinner and cook food at home.
If you are not able to make any progress with those ideas, you need to make more money.
If you haven't already made a budget, now would be a good time to do so, as you may find doing that other areas you can cut spending.
How you handle it afterward is a different story.
Whether debt is from excessive shopping, a job layoff, an unexpected expense, it has to be paid for.
There are different ways to handle this.
Essentially, you owe more than you make.
So you either need to decrease your spending, or increase your income.
For more income, you can get a second job, work odd and end jobs, etc, or you can take steps to help pay down the debt faster.
Call your creditors - Call your creditors and see what you can do to help make the debt go away faster.
You'll be amazed how often they are willing to make a payment plan, especially if you have been making regular payments and trying.
They would rather get their money over a time period than not at all.
A payment plan has to be reasonable, $10 a month on a $1000 debt is not reasonable.
If you cannot get satisfaction from the first person you speak to, ask to speak to a supervisor.
Get your interest rate lowered - Is your debt credit card debt? Have you always made your minimum payments on time? If so, you are considered a good customer.
Call the company and see if they can lower your interest rate.
It never hurts to try.
Snowball your debt - This is an idea from Dave Ramsey.
Lets say you have two debts, one for $1,000 (Debt A) and one for $10,000 (Debt B).
You pay the minimum on both, and then put any extra money you have onto the smallest debt, the $1,000.
Once that is paid off, you take the minimum you were paying on Debt A and apply it to Debt B, including the minimum for that.
Cut Spending - See what you can decrease - internet, TV, cell phone, you don't have to cancel these items, but see if you can decrease all the services you get with them.
Maybe you cut out how often you go out for dinner and cook food at home.
If you are not able to make any progress with those ideas, you need to make more money.
If you haven't already made a budget, now would be a good time to do so, as you may find doing that other areas you can cut spending.
