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Step 1
Create a monthly budget - Most budgets fail because of the refusal to create a realistic plan. You will not save every extra penny and send it off to your creditors. You will not stop eating out forever. Create a realistic budget, taking into consideration that you do have to live. Getting out of credit card debt will not happen overnight. You do not want to make yourself so frustrated that you quit only 4 weeks into your new plan.
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Step 2
Use Cash Instead of Credit - Credit card debt is the problem. Do no intensify the problem by adding to it. Follow the budget your created in step one and resist the urge to purchase something that you clearly do not need. Use the envelope method as explained by Dave Ramsey (see link below on where to get your cash envelopes).
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Step 3
Use direct deposit - Have your money work for you instead of you working for your money. By depositing your paycheck directly into your bank, you can go ahead and write out the checks you need to send off. Better yet, open an online banking account and pay your bills electronically (and save the $0.42 for the stamp).
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Step 4
Cut Back on Discretionary Spending - Discretionary spending can be defined as anything that is not a necessity. The mortgage and the light bill are necessities. That $5 cup of Joe from Starbucks is discretionary. Try and reduce the number of times that you eat out each week. Cut back on your cell phone usage and reduce your monthly cost. Little things add up quickly when you are getting out of credit card debt.
Comments
maryellen1001 said
on 11/30/2008 Great advice.
sunshine11219 said
on 11/25/2008 good article
MomWhoWrites said
on 11/25/2008 That is some very solid and helpful advice. It may be tough to give up your Starbucks but even just a couple times a week will make a difference.