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10 Tips to Get Out of Debt

People suffer from unforeseen factors and events, which can suddenly have debt increase. A job layoff is a good example of how someone can go from being debt free to struggling to pay for groceries. Other individuals might have extraneous spending habits in which poor money management is part of their debt troubles. There are 10 tips we can offer to help you alleviate your debt troubles, including the use of a free payday loan. A free payday loan provides you with the money you need between paychecks, without the interest attached. Often there is still a small processing fee, but as long as you pay the loan off within a certain time frame it is free. It is not the best option, so our 10 tips to alleviate debt should be considered first.

1. Budget your money on a monthly basis. A calendar is a good tool for this since it allows you to see what bills need to be paid when and to put how much. You can also use a spreadsheet to calculate what you need for the month. Any extra income can be saved or sent to your credit cards.

2. Pay the balances on your credit cards that have the highest interest rate, first. If at all possible condense your credit cards down to one payment. However, you should not exceed the 50 percent mark on the credit limit to help your credit scores remain in good standing.

3. Limit yourself on how much you can withdraw from an ATM during the month. For example, you might put a limit of $20 per week for incidentals like eating lunch out at work. Have your paycheck direct deposited also to alleviate the need to get cash when you get your check.

4. Discretionary expenses should be lessened. This means less eating out, not overusing your cell phone, or spending money you do not have on less important items.

5. Try not to borrow money to get out of debt such as consolidation loans. By obtaining another loan you are still not getting rid of the debt, just changing it around.

6. Look at your living situation. Are you renting? Do you have a mortgage, property tax, homeowner’s insurance? You might be able to lessen these burdens in refinancing the mortgage or finding better insurance plans.

7. Instead of using credit cards use cash. Have a credit card only for emergencies such as buying a new fridge because the old one breaks or fixing your car because it has broken down.

8. Look for bargains. Start using coupons again, search the net for better deals, and avoid paying shipping whenever you can.

9. Look for ways to save money such as having a part time job or garage sale to bring in a little extra.

10. Always keep in contact with your creditors to see what deals you might be able to make, especially if they are threatening you with debt collectors. Never let the creditor have the upper hand. Instead, work with them.

Get out of debt

If your total debt repayments exceed 20% of your income after paying mortgage or rent, then you may be in a serious financial problem and you need immediate help. There are different ways by which you can take care of the existing situation and become debt free.

To get out of debts caused by excessive credit card usage or unexpected expenses, consider the following alternatives.

  • You may seek credit counseling
  • You can opt for a do it yourself method.
  • You can enroll in some online debt consolidation program
  • Or consider filing bankruptcy.

Many people think that credit counseling works on the same principals like debt consolidation or debt management program, but actually it is much more than that. Credit counseling is about educating consumers, making informed decisions, do a proper planning of your future keeping your present situation in mind. Putting everything under one umbrella, you get a perfect debt relief program.

The DIY or “Do it yourself” is a self designed program where you negotiate with your creditors on your own, paying off the debts with the highest interest rates first. Many people get a second job to have an extra source of income and contribute towards paying existing debts. While this may certainly be the most effective step to boost your credit ratings, one requires a lot of strong will and self discipline to follow this approach to the completion.

When you enroll in an online debt consolidation program, you are able to combine all your existing debts under one repayment plan with your creditors through the debt consolidation company. The basic advantage of this type of program is that your debt consolidation company will be able to reduce the interest rates with your creditors and set up a lower repayment plan. You make one monthly payment to the debt consolidation company and they disburse the payment to all your creditors in the program. When you are enrolled in the online debt consolidation plan, make sure that you do everything to stick to the repayment plan set by the debt consolidation company. Just in case, if you miss a single payment, your creditors will no chance and they will raise the interest rates back to where it was. You should be mentally set up before opting for this debt relief program. Otherwise the next best option will be to go the debt settlement route or file for bankruptcy.