Have you sat down and actually added up how much money you owe to creditors? This can be eye opening to people. You may want to leave out your original mortgage, but if you have a home equity line or second mortgage you should include that amount in your total. This would also include what you owe in student loans, and on your cars. It the number manageable. Is there anyway that you could pay this off in a year? Or is the number higher than what you bring home in a year?
Adding up your total debt can be eye opening. Another effective tool is to add up the amount you are paying in interest each month. This is money simply going to waste, because you borrowed the money to get things. This money would be yours if you had not gone into debt. How much are you paying? Is it relatively low about forty or fifty dollars a month or is it higher?
The next thing you can do is to add up the interest you earned on your investments this year. Is this amount higher than the interest you paid? If so you are in a great financial spot. If not you may want to begin to make some changes.
Now that you have looked at the big picture are you ready to make some changes. What can you do to reduce the amount of interest that you have paid? You can call your creditors and ask them to reduce your interest rate. You may also consider surfing your balances to a zero percent card, as long as you know you are disciplined enough not to run the amount back up on your other card.
While the amount you owe may scare you, you may be surprised at what knowing actually does for you. You are now ready to make a plan to get out of debt. If you plug in the numbers and really stick to it, you will be able to pay off your debt a lot more quickly than you think.
Related Articles:
Five Tips to Help You Stop Using the Credit Cards
How To Set Up a Debt Reduction Plan