Become Debt Free in 2009
When debts get out of control it doesn't just hurt your bank balance, it can cause problems to your health, relationships and at work due to the stress. Don't try to ignore it, take the opportunity for a fresh start this year and get yourself debt free. Get some easy tips to get you started.
If your currently losing sleep over your debts and financial position then your not alone. Millions of people are in the same position and each year fail to do much about the situation other than worry and stress which can lead to problems throughout your life with health problems, strains on relationships or lower performance at work. If you want to remove the biggest cause of stress then you need to be free of bad debts. It's an easier problem to solve than you might think and now is the time to take control.
Here are some ideas that might help you get your debt under control faster.
Curb Your Spending: The basic reason you have got into debt is because you are spending more than you are earning. Unless you change your habit then you are not going to get out of debt. Start by creating a household debt and looking at all your incomings and outgoings. Try and find parts of the budget where you could make some cut backs on the less essential items such as dining out, travel, cable TV or clothes and then set a monthly limit for non-essentials. Make sure you set aside in amount in the budget to make extra repayments on your debts and push them down. You can also ensure you don't incur any other debt. Consider switching to cash or debit cards for everyday purchases and avoiding new purchases on credit cards.
Consolidate Your Debt: When you have lots of different debts such as multiple credit cards and personal loans it gets hard to manage. You don't really know exactly how much you owe or when things are due and you may be paying too much in interest. With multiple debts you also increase the risk of forgetting a repayment and causing further damage to your credit score.
If you don't want to put your house on the line as security then an unsecured debt consolidation loan may be of interest. An unsecured debt consolidation loan means you do not have to provide a security such as your home for the loan. Rates may be a little higher than a secured loan but if you don't want to put your home on the line then this could be suitable. It's important to look for a debt consolidation product with an interest rate below that of your existing debts. By moving your higher interest debts into a lower interest product repayments will go towards paying the debt off rather than just paying the interest charges.
Another unsecured debt consolidation product is to use a credit card with a good balance transfer offer. Be careful with this though. You should choose a balance transfer period long enough to pay off most of your debt and choose a card that will revert to a low ongoing rate. Otherwise you may be stung with high interest once the offer ends. Also, read the small print and make sure you make repayments on time as many balance transfer offers are terminated if you make a late payment and interest is charged at the full rate.
Find Extra Money: You can also look at doing a few things to raise some extra money to pay down your debts. Go through your house and garage and clear out everything you don't use very often and could live without. More valuable items can be sold through Ebay while smaller stuff could be sold through a garage sale. Take all the money from the sale of the items and pay it straight off your debt.
Don't waste any more time and take control of your spending and debt today. If you're still not sure where to start then do some more research online or look for debt counselling services or a financial advisor. Be careful of debt management companies to ensure they are looking out for your interests and not theirs.
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ABOUT THE AUTHOR
Article on debt consolidation loans by Richard Greenwood from Aussie credit card comparison website click4credit.com.au. The site features useful articles on financial and debt management as well as enabling the direct comparison of credit cards, debit cards and debt related products.