payoffdebtssavemoneytips

Tips To Pay Off Personal Debt And Save Money 


Do you know that the easiest way to avoid financial difficulties is to pay off debts and bills on time? By so doing, you will improve your credit rating and a good credit score will put you on solid monetary grounds.

Credit cards and personal debts are the dilemmas of today's society. Most credit card holders spend almost all of their incomes on personal debts and there is practically nothing left to save. It is nearly impossible for an individual with an average income, who is in a critical financial condition, to afford all of their expenses, such as mortgages, credit card bills, utility bills and food costs

Here are a few steps that we at payoffdebtssavemoneytips.com have found effective to help you pay off debts and ways to save money.

1. Understand and control the emotions that caused you to be into debt. Overspending is always emotionally driven--a sense of entitlement to a certain lifestyle ( vehicle, big house, lavish apartment), the need to keep up with one's peers, the need to feel valued and loved, or the necessity to feel better about oneself. Fiscal planning, learning, and advice will not help you until you understand  your emotional faults related to cash, and learn how to control them.

2. Keep a spending diary. To figure out what's leading you to overspend, keep a daily spending diary for a minimum of one month and track your spending relentlessly .Set up columns for the dates, the amount you spend, the items you purchased, the reasons behind the purchase, or what you felt at the time of the acquisition. Carry the diary with you everywhere and fill it in immediately after you spend any amount of cash, no matter how little the amount. By the end of one month, you will have a record of things on which you have wasted your hard-earned money. Perhaps, almost importantly, you will have examples of  emotion-driven spending.

3. Set a budget to determine how much you realistically can allocate to pay off your debts. This'll help you decide the sum you can commit to paying off your debts every month.

4. Set aside one day's revenue each week for paying down debt. This is an alternative approach to allotting cash for debt repayment. It means that you are putting aside 20% of your take-home pay to settle debt.

5. Prioritize your debt payments. Make a list of debts with the name of the creditor(s), total sum owed, rate, and minimum standard payment. Then focus first on the debt with the highest interest rate. After that debt is paid off, focus on the next. Use the money you were paying on the previous card (or cards), plus the 20% you would have put toward paying this card down. Thus you will be getting out of debt much quicker as you move down the list.

6. Call and ask creditors to lower the rate on outstanding balances. Try negotiating with your creditor(s) to have a reduction of your interest rate for 3-6 months as a trial period, during which time you guarantee to make all your payments on time. (Keep that promise.)

7. Set a fixed date to be totally debt free.  It's much easier to keep yourself motivated if you've got a specific date to settle your debts, instead of feeling as though you'll be making payments forever.As another incentive,  give yourself a small reward as you meet your goals.

8. Pay cash. Paying cash for your daily expenses helps you limit your spending as you watch the money in your wallet diminish.What pull a fixed amount (your weekly spending allowance) from the ATM or bank once every week. You should control your expenditures and manage fixed expenses so that you can live within your means.

9. Create "no spending days." A few times a week go through an  entire day without spending any money. Don't buy a coffee, a soda, or a mag. This is a crucial test and a much-needed asset if you truly want to escape debt.

10. Use any bonus to pay debts. Let's assume you get a $4,000 bonus and you have an unpaid balance of $8,000 on a Visa card. (Offer to pay the creditor the)Pay $4,000 to clear the entire balance immediately.  If you reach an agreement with (them), be sure to follow up in writing or e-mail. Get a written response from the creditor accepting the suggested payoff before you send in the check.

11. Make a credit card payment plan. You can start to pay off the card with the lowest balance first. If you make an effort, like skipping happy-hour or making one less $200 purchase (think gadgets and shoes) every month, those savings can be applied towards the debt. The same system works with credit lines and personal loans, too.

12. Pay more than the minimum. Many loans are set up so that the minimum payment goes mostly towards the interest. The fact is, if you have $10,000 in bank card debt, and are paying 15% in interest, and making the lowest payments, it'll take about 25 years to pay down that debt. You don't want to be enslaved by the card companies.

13. Shop for an improved rate. When you get a great opportunity for a reduced interest rate, go for it. Instead of the 15% or 22% rate you are currently paying, you can move to a card that offers you a 6% or 9% rate to save hundreds -- or thousands -- during the course of the year

Shop for better rates at sites like www.bankrate .com, and benefit from offers provided by your bank, credit union, or other lending institutions that offer low rates for transfers. But do not bounce around too much because doing so leads to credit investigations, which can lower your credit history. Also consider debt consolidation, which is taking one or two debts and converting them into one monthly payment.

14. Set a Flexible Spending Plan -- now! As you pay off your Visa cards, don't cancel them. As an alternative, take all the credit cards out of your wallet and put them in a jar half-full with water. Put the jar in the freezer. The idea is to keep the cards out of your pockets and limit impulse shopping. By placing them in your fridge and not in your pocket, you're keeping these cards in a safe place in the event you need them in an emergency.

15. Pay money for everything -- debts too! If you have a savings account, the general rule of thumb is to have three months' worth of revenue to use as emergency savings. But if you are in debt, spending some savings to reduce debt officially qualifies as an emergency. Take at least 25%of your savings and put it toward your debt. "Even when debt interest is at 12%, your investment would need to pay more than 18% before federal and state taxes to equal that outflow of dollars," according to The Motley Fool, an individual investment Web site ( www.fool.com ). In other words, you'll get a bigger return by paying down the high-interest debt with savings, which on its own might gain only around 3% to 5%.

16. Find another stream of income. Before we consider methods to increase your income, you should know that it won't make any difference if you don't put it aside or use it on your debt. The point is, you have to change not only your income but also your perspective.

Find a way to earn some additional cash on the side. Everyone does something well that they can do for others,  e.g. cooking or tutoring. You can perform a service, for instance managing a Website, selling a product like , jewelry, or selling your wares on eBay. Ask colleagues about opportunities outside your company or maybe createan application for positions with transient agencies.

17. Manage your own finances. You must always know three things about your debt: ( 1 ) how much you have, ( 2 ) how much your debt is costing you, and ( 3 ) what is the best options to settle your debts. If you don't set your financial goals, it will always cost more than you think and take even longer to pay down. The debt may not disappear overnight, but with discipline and by following these steps, it'll shrink a lot sooner.







Home
 
payoffdebtssavemoneytips.com.