Debt Reduction Strategies for the New Year
January 2nd, 2008 | by Molly's Brother |This is the time of year when the entire Western World is engaged in defining the new “resolutions” by which individuals will live their lives. As you can see from my New Year’s Eve post, throw your resolutions away. Instead, establish goals. Develop strategies and tasks to meet these goals. In short, make a plan. Make this the year that you decided to get out of debt. It will take some work, but if you begin to implement some strategies, you will be able to live a debt-free life someday.
1. Stop using your credit cards. It was the use of the credit cards that got you in debt. Deciding not to use them is one way that you can start to get out of debt. Figure out a way to stop using your credit cards today. Leave them at home. Carry cash. Have your significant other hide them. Do whatever you need to do. But do something!
2. Add extra money to your monthly credit card bills. Every month, instead of paying the minimum amount due, add extra money to your credit card bills. According to Bankrate.com, a $7,000 debt with an 18% interest will be paid off in almost 350 months (if you pay the minimum balance). If you added just $25/month to each payment, you could pay off the debt in 51 months! Saving you $7,000 in interest payments.
3. Develop a plan and stick to it. However you are going to pay off your debt, develop a plan and stick to it. Figure out a way to decrease your monthly expenses. Find a way to make more money. Get a job on the weekends or a part-time job a couple of times a month. Devote all new dollars coming in to paying off your debt. Do what it takes to dedicate more money to paying off your credit card debts. Develop a specific plan and stick to it.
It is not impossible to pay down debts. Many people have done it. It is not easy, but it is entirely feasible. Remember, it took some time to get this far into debt. It will take some time to get out of it.
