Debt is No Fun!

The paycheck is deposited into the bank. By the time all the bills are paid and groceries and gas bought, there is nothing left. What’s more, if an emergency car repair or visit to the hospital becomes necessary, there is no way to pay for it other than one of those charge cards. And which of those cards has enough left for this emergency? Sound familiar? Well, you are not alone. 70% of Americans have so much debt, they will be paying on it and additional debt accrued for the rest of their lives. There is expert advice which can give wise moves to help you eliminate debt effectively and stay debt free, if you will incorporate them in your life permanently.

What is Your Debt-To-Income Ratio?

This question is the first one you must ask if you are to become debt free for life. Take your gross monthly income and divide it into the total of your debt payments each month. If the result is .50 or more, you are in dangerous territory, and you need to do nothing but pay down debt for the next many months. If it is less than .50, you are not in trouble, but you do want to eliminate it just the same. If you look at the total debt payment, think about what you would do if you had that much in surplus income each month. You could save and invest for a great future; you could pay cash for things that you are now charging. You would have money available for those emergencies that always seem to crop up at inconvenient times.

What the Experts Say to Do

The first step is to list all of your debt from least to most. The smallest debt is the one you can reasonably attack at first. If you will take all the money you normally spend on frivolous items and impulses each month and put it on this debt, you will be amazed how quickly you can pay it down. Then you can move on to debt #2, and so on. This takes time, self-discipline, and commitment, but you need to remember the goal. Tell others what you are doing, so you will be guilty and embarrassed if you fail. Ask family and friends to support your effort by not tempting you.

Another good idea is to take advantage of those credit card offers which give introductory rates, sometimes as low as 0% on transferred balances. If you can get 0% interest on even some of your debt for one year, every penny you pay goes directly to reduction of the debt. When the introductory period expires, transfer to another offer. You have to be organized and keep a calendar, but the savings will be fantastic. Of course, you need to cut up your high interest cards as well, or you could give in to temptation. Bill consolidation can help by rolling all of your high interest debt into one large loan with a lower payment. The excess you have each month can be applied to that single loan or put into savings.

Plan for holiday shopping throughout the year, so that you can do it a bit at a time and pay cash when bargains are available. Tell friends and family that holiday giving will not be as lavish as before because you are going to be debt free in your future.

Do not go to any store without an exact list of what you are buying. Walking aimlessly through retail establishments is a dangerous activity, for window shopping turns into real shopping very quickly. If you cannot resist this temptation, someone else needs to shop for you.

Find inexpensive leisure activities. If you normally meet people for happy hour after work, have them bring a snack and their own beverages to your home. Play cards or watch sporting events at home with friends. Your social life does not have to be expensive.

You will probably devise a number of other ways to conserve cash and pay down debt as you go along. Think of it as a game and you will actually enjoy some of the moves.