A Simple Debt Reduction Strategy to Follow

Don’t beat yourself up if you find yourself in deep debt and in dire need of debt reduction help. You are not the only one in this situation. In fact, all you need is resolve and a few simple debt reduction guidelines to follow in order to turn your situation around and get your life back under control.

First Step to Debt Reduction: Stop Living on Credit

The first thing you need to do when you find yourself is to lay off the credit. Put away your credit cards and line-of-credit checks, and live as if they didn’t exist. Try paying in cash. This will force you to prioritize your spending and recognize which purchases are ìwantsî and which ones are “needs”.

Second Step to Debt Reduction: Up Your Income

Once you have stopped adding to your debt, you need to work on reducing it. This means acquiring enough income to do two things: live by cash and repay more than your monthly minimum payments due. If you are married and only one person is holding a job, perhaps the other person can consider applying for a job, whether full-time or part-time. You can also consider starting a home based business to supplement your income.

Third Step to Debt Reduction: Spend Within Your Limits

Your total spending should always be within your limits and never, never amount to more than your total income. Easy credit tempts people to overspend without realizing it, leading them into a kind of bondage, e.g., economic slavery. You need to plan ways of earning sufficient income over the short term so that you can cover your expenses and chip away at your outstanding sum owed, so that you do not enter into this form of slavery.

Fourth Step to Debt Reduction: Pay More than the Monthly Minimum

Make a firm decision to pay more than the monthly minimum on your debts. You should aim to use 10% to 15% of your income for debt repayment. Even better would be to make a goal of paying between 3 and 5 times the monthly minimum due on your credit cards. To make sure that you can achieve this, put away some savings every week, even if they seem small. They can quickly add up and do wonders to paying off your debts.

To keep your debt reduction strategy on track, pay your bills early and do not spend beyond your income. Also remember that late payments beyond 30 days will affect your credit rating for up to 7 years. So stop the credit, raise the income, spend within your limits, pay off your debts and take your life back.

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To Your Financial Success
~Suze Fulton

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