Free Advice for Reducing Debt
Credit cards make it easy for individuals and families to quickly rack up debt. Debt counts against you when you apply for a loan, such as a mortgage. It may be necessary for you to reduce the debt in order to qualify for a loan. Creating a plan and sticking to it is the best way to lower your debt and eventually eliminate it. You can then begin saving money for future expenses instead of putting them on credit.
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Create a Budget
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Create a budget and stick to it. You can't reduce your debt if you don't first know how much money you have to spend in each category. Locate your credit card bills as well as any loan statements and write down the minimum payment. Add an amount you can afford to pay to that minimum payment and set that amount next to your debt category. For example, your minimum payment may be $150, but you would set your budget at $200 for the debt category. Paying above the minimum payment each month allows you to see your debt reduced each month.
Consolidate Your Debt
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Consolidate your debt into one payment. This reduces fees and allows you to see easily how much you owe. The amount you need to pay each month will also be lower than the combination of each individual debt payment you were making before. This means it is easier to pay above the minimum payment each month to attack the debt and bring the balance down.
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Add a Source of Income
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Get a temporary part-time job or weekend job and designate every dime to go toward your debt. Once you have paid off your debt, you can quit the extra job. If you can't find part-time employment, consider having a few yard sales or selling unwanted items on auction sites. Remember to send every dollar you make to the company with which you have the debt. Continue doing this until you have paid your debt in full.
Reduce Expenses
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Reducing your expenses leaves you with extra money at the end of the month. You can send that money to the company to which you owe money. Some ways to reduce your expenses include eating at home instead of in restaurants, choosing basic cable instead of a higher package, lowering the temperature in your home to save on heat and organizing your errands on one day to save on gas.
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