7 Ways to Get Out Of Debt and Start To Live Debt Free

Written by admin on April 18th, 2011

Statistics show that the average family in the US has a staggering $ 9,000 worth of unsecured debt. This is mostly credit card debt due to the rising trend of people living beyond their means in a desire to have everything now. Going without and saving up seem to be two very out moded ideas these days! But anyone maxing out their credit cards in tough economic climates is likely to get into debt very quickly as the mounting interest compounds month on month.

Pay your credit card bills on time

To avoid accruing interest on the unpaid interest from last month, always pay your credit card bills on time. Do not wait for the due date to pay. If you are forgetful, pay your bill when it arrives. And ALWAYS pay as much as you can afford but NEVER pay the minimum amount only. The longer it takes for you to pay your debt, the more the interest charges will be as they mount up. According to Cambridge Consumer Credit Index, most Americans pay more interest on their credit card debt than they ever incurred in debt. This is because people often only pay the minimum amount, leaving unpaid balance to accrue more interest.

So to avoid getting into debt, here are seven top tips to help you live a debt free life.

1. Use your credit cards for emergencies only.

If you only use your credit card in emergencies and then pay off the debt within 30-90 days, you will avoid getting interest added, increasing your debt.

2. Do not use your credit card to pay off another debt.

If you are already in debt, do not be tempted to pay it down using another credit card. This is simply robbing Peter to pay Paul and does not address your debt problem. Unless you are certain that your credit card has the best interest rate, this strategy will also send you further into debt and may impact on your credit score. You will lose your available credit too.

3. Get professional advice from credit debt companies.

They will help you consider a range of different debt management plans open to you including different debt consolidation options or simply completely paying off the debts with the highest interest rate first and then other debts.

4. Create a family budget that will help you take care of your obligations.

Factor in all your income, allowances and assets and balance these against your outgoings, spending habits and debt repayments.

5. Reduce your expenditure.

Find ways to reduce your unnecessary spending. This is key if you want to get out of debt quickly. Be practical, frugal and economical. Shopping around means that you can save more money on everyday things. Do not indulge in retail therapy. You can find more important things to spend your money on.

6. Increase your incomings.

Think of ways you could boost your income. Maybe you could take a part time job, or retrain for a better paid job? Look around your house to see if there is anything that you could sell online to raise money. More money coming in means more money to pay down your debts.

7. Save a little bit every month.

Try your best to save something every month, regardless of how much it is. This is a very good habit to get into. And over time it will add up to give you a small nest egg for emergencies.

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