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10 Tips for Getting Out of Debt |
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Stop spending what you do not have. If you have been using credit cards to pay for things, stop. Develop the mind-set that if you do not have the cash, you do not need it. You might want to have a family meeting to discuss this so everyone is on the same page.
Live within your means. Do a household budget so you can see where your money is going each month and how much is coming in. This can be a revelation. It can be as simple as calculating all expenses, calculating all income, and comparing the two.
Sell what you are not using. Do you have a Wii that is collecting dust? Consider selling things like this on Craigslist or eBay. Go through your closets and pick out things you do not wear or use that are worth selling.
Raise your income. Typically, this means someone getting another job. Everyone in the household who is able and of appropriate age can take on even small jobs. Consider getting a part-time weekend job.
Incur no new debt. Sometimes when we feel bad, we spend to provide temporary good feelings. However, it is only temporary. You will get great feelings from gaining control of your finances, especially when you have been trying to avoid doing it.
Negotiate high-interest debts with creditors. You may not always be successful. Top personal financial advisors recommend this. Call and ask to speak to an account manager about lowering your interest rate. Consider leveraging your income tax refund to pay off a debt by offering to pay a percentage of it in one lump sum.
Snowball debt payments. As soon as your smallest debt is paid off, apply the payment you were making on that debt to another debt. Repeat to continue to gain leverage.
Cancel unnecessary services. That may mean going without cable for a while. If you do not use your internet service much, consider getting rid of it. Netzero will provide 10 hours of free dial-up internet service per month.
Learn to live frugally. Consider growing a garden. Use coupons when possible. Remember, though, that just because you have a coupon for something does not mean it is your best buy. Compare prices.
Read personal finance books. You do not need to go to the bookstore and pay full price for great books on debt reduction and personal finance management. The library is a treasure trove and free.
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