Given all our recent discussions on credit cards, I felt it was only fitting to also discuss debt. In today’s credit-charged world, our “dreams” are often only a charge card away. While at first this may seem like heaven, all it takes is an overzealous spending spree or unexpected financial problem and your credit card debt can quickly turn your dream lifestyle into instant hell.
While there is a time and place for credit card use, ultimately financial success means avoiding debt. Over time, building too much debt can actually lower your standard of living. At first, accumulating expensive material goods may make you feel “rich,” paying off that debt, plus interest will actually make you very poor.
With large amounts of debt, you are dramatically restricting your cash flow. This can make it very difficult to live within your budget. As your bills increase, you no longer have any extra money to play with and in some cases even live on. This stress is certainly not what financial freedom is all about.
If you can relate to any of this discussion, it is time to get out of debt. In order to accomplish this task will take some dedication on your part. But, believe me, it can be done.
While different situations will require different tactics, to start reducing your debt consider these tips:
1. Live beneath your means. Stop using your credit card and create a budget to cover all the basics, a budget that will allow you some extra salary left over.
2. Take that extra money and put it directly into paying off your debt.
3. Negotiate with your creditors. Are there any lower interest plans to help you pay off your debt quicker?
4. Always address the higher interest rate loans first, as they are costing you the most to keep.
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*Adding It All Up–How Much Debt Do You Really Have?
*Can You Borrow Your Way Out of Debt?