Control And Minimize Debt With Planning
Friday, May 6, 2011, 2:00 AM | Leave Comment
If you are heavily in debt like many folks are, you need to try seriously your best to control, manage and continually keep minimizing your debt. The best thing is to stop borrowing outright NOW. Otherwise, you would keep getting into debt deeper and deeper and a time would come that you would feel hopeless, under heavy stress, seeing nightmares if you are able to sleep. Your life, financial and otherwise, would become miserable. The only option for you would be to declare bankruptcy resulting in the worst credit history you can ever have.
So follow the below points to control, minimize and eventually get out of your debt. With planning and practice, you can overcome and eliminate the misery of debt in your financial life.
10 ways to control debt
Either live a miserable life till death do you apart from debt [you wish. Your spouse and kids might have to carry your debt burden on their shoulders, with no fault of their own] or you can practice the following 10 ways to control debt, minimize it and live a stress-free life. And remember! Don’t think with your heart, i.e., don’t make emotional decisions. Think with your mind – rational and logical decisions.
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Spend less than you earn. If you spend more, you would be spending money that belongs to others, the money you don’t have.
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Never borrow to pay living expenses or to buy items that decrease in value. Be discreet in using credit cards.
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Paying of what you had borrowed is never easy. Don’t borrow again what you have already paid off.
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Use credit card only when you know you can pay off the bill in full by the due date. At least pay more – a lot more – than the minimum so that you are eventually able to pay it off.
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Make your own financial decisions and use your own judgement and not the so-called common sense. That means never trust a lender who says “you can afford it.”
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Take your time and ask questions. Borrow only when the answers make sense to you and you only, not to others.
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Simple solutions are always the best. Avoid debts the conditions for which you don’t understand.
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Avoid extras when you borrow. They are designed to get you into debt deeper.
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Avoid no money down or low introductory fee. Eventually at the end, you pay more. The less cash you put into debt, the more you end up paying in interest.
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Your finances can always get messed up. Always leave a margin for safety.
Five ways to win the war against debt
If you are determined and have learned from your past mistakes and the mistakes of others, then you can win the major battles against debt.
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Make a financial plan, a budget. Set targets and take genuine action. Don’t just drift along with the wind of greed and never-ending borrowing.
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Always pay more than the minimum on your loans. You would realize soon enough that even a tiny additional sum in repayment can save a fortune in interest and will get you out of debt a lot sooner.
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Each year when you get pay raises and tax refund, pay these amounts in repaying your debt.
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Attack one debt at a time. It’s easier to focus on one type of debt for repayment. It can be psychological boost to your moral and you would feel that you are winning the war against your debt.
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You would realize pretty soon that it’s always better to start small than not start at all. The sooner you start, the sooner you would be able to manage your debt and the sooner you would be out of debt.
In a Nutshell
Granted it’s hard to get out of debt, but if you are determined and have made genuine decision of putting yourself on the path of debt-free life, then you can do it. Anyone can do it.
