Easy DIY Debt Reduction Plan
_It really is possible to create a very simple DIY debt reduction plan that will help you to not only understand the reality of your financial situation but also to show you what needs to be done to get rid of that debt once and for all.
Step 1: Snapshot
It is important that you have an accurate snapshot of how your finances look today before you begin your debt reduction plan.
Grab some paper and write down exactly how much you owe to each bank, credit card Company, or creditor. Alongside each balance, create a new column and write down how much your repayments are each month.
When you’re done, add up the total of both columns and take a good look at exactly how much you’re paying out each month and how much money you still have to pay back.
Now create a separate column and enter any income that comes into your household each month. The amount of money left over from your income after your repayments have been made is the money you have to pay for bills, groceries, fuel, and entertainment.
It’s normal to get depressed or upset at this stage – but don’t give up. This is just step one. Every step after this is designed to get rid of both of those scary figures.
Step 2: Get Tough
Call your creditors and tell them you’re not happy with the amount of interest you’re being charged. Tell them you want your rates reduced. Ask if they have alternative financial products that have lower rates available. If the customer service operator on the phone won’t help you, thank them and let them know you’ll be taking your business elsewhere.
Do a little research and see if you can find a credit card company offering really low rates on balance transfers. You might find a personal loan company charging lower rates. You could even find a transaction account or checking account with a different bank that will charge you much lower fees.
Step 3: Reduce Payments
Living like a pauper is no fun and so many debt reduction tips say to stop having a life and doing all the things you enjoy. So let’s work from the opposite end of things. Let’s cut back your repayment amounts instead.
Do a little research on the internet. You might find that a debt consolidation loan will get rid of your credit cards and consumer loans so you only have one new repayment each month. This repayment is usually much lower than the combined payments of the smaller loans you have, so you’ve suddenly got some cash left over at the end of each month.
Step 4: Persist
Never give up on your goal. The main reason many people give up on their debt reduction goals is that they can’t see progress happening quickly enough. Just the same as it took you time to get into your financial mess, it’s going to take time to get back out of it again too.
Don’t fall into the trap of spending more money on credit just because you’ve reduced the balance on them. The idea here is to break the credit trap you fell into, not to continue the negative spiral with even more debt.
Lastly, believe you can do it. Have confidence in yourself and stick to your plan. You’ll be glad you did.
Step 1: Snapshot
It is important that you have an accurate snapshot of how your finances look today before you begin your debt reduction plan.
Grab some paper and write down exactly how much you owe to each bank, credit card Company, or creditor. Alongside each balance, create a new column and write down how much your repayments are each month.
When you’re done, add up the total of both columns and take a good look at exactly how much you’re paying out each month and how much money you still have to pay back.
Now create a separate column and enter any income that comes into your household each month. The amount of money left over from your income after your repayments have been made is the money you have to pay for bills, groceries, fuel, and entertainment.
It’s normal to get depressed or upset at this stage – but don’t give up. This is just step one. Every step after this is designed to get rid of both of those scary figures.
Step 2: Get Tough
Call your creditors and tell them you’re not happy with the amount of interest you’re being charged. Tell them you want your rates reduced. Ask if they have alternative financial products that have lower rates available. If the customer service operator on the phone won’t help you, thank them and let them know you’ll be taking your business elsewhere.
Do a little research and see if you can find a credit card company offering really low rates on balance transfers. You might find a personal loan company charging lower rates. You could even find a transaction account or checking account with a different bank that will charge you much lower fees.
Step 3: Reduce Payments
Living like a pauper is no fun and so many debt reduction tips say to stop having a life and doing all the things you enjoy. So let’s work from the opposite end of things. Let’s cut back your repayment amounts instead.
Do a little research on the internet. You might find that a debt consolidation loan will get rid of your credit cards and consumer loans so you only have one new repayment each month. This repayment is usually much lower than the combined payments of the smaller loans you have, so you’ve suddenly got some cash left over at the end of each month.
Step 4: Persist
Never give up on your goal. The main reason many people give up on their debt reduction goals is that they can’t see progress happening quickly enough. Just the same as it took you time to get into your financial mess, it’s going to take time to get back out of it again too.
Don’t fall into the trap of spending more money on credit just because you’ve reduced the balance on them. The idea here is to break the credit trap you fell into, not to continue the negative spiral with even more debt.
Lastly, believe you can do it. Have confidence in yourself and stick to your plan. You’ll be glad you did.
