Get Out of Debt
(7.) Get Out of Debt, Now is the Time
You need a certain amount of debt in order to build your credit history. Unfortunately, that is how the system works in America. You must have a credit history and the only way to do that is to apply for that dreaded credit card! I say to you though plan to get out of debt
as quickly as you can! In this day and age, we must at all times practice the best debt management principles in order to protect ourselves from financial disaster.
Now, having said that – we must be smart about how we go about managing our debt. Judiciously using your credit card, whereby you pay the balances off each month, is one smart thing to do. A loan or two in your name for various things like a car or just a personal loan are good as long as the payments are always paid on time.
Why You Need to Plan to Get out of Debt Now!
A middle-aged mother, Mary, was divorced from her husband of 15 years. It was a difficult divorce, and now she would have to go back to work after staying home with their three children for 10 years.
She was starting her financial life from ground-zero, as when she was married all of their credit and debt was in her husband’s name only. She applied for many credit cards, and to her delight, was approved for all of them. This gave her the opportunity to furnish her home as she liked, with brand new furniture and lovely decorations.
Mary’s new boyfriend, Phillip, moved in, and he helped her with expenses when he could. A year later, Mary decided that she could purchase a house instead of continuing to rent. Her ex-husband pays a lot in child support due to his good job, so she included this as income on her mortgage applications.
She was quickly approved for a very large mortgage, and found a home on a lake that she never before thought she would be able to have. She was able to purchase the home with no money down at all, and they even gave her thousands of dollars back at the closing.
Life was being very good to her.
Mary continued to purchase things she wanted, and gave her children whatever they desired, too. Every year when she received her federal tax return, she booked a lavish cruise for her family. They went someplace new every year.
A little over a year later, Phillip lost his job. It was a difficult time for all of them, and they began arguing over money. Mary didn’t feel Phillip was contributing enough. Mary’s friend Stacy was getting divorced, and asked Mary if she and her children could stay with her for a while. Mary loved the idea of having a friend live with her, since she and Phillip were fighting so much. Unfortunately, Stacy did not contribute any money to the household, even though she had a great job.
Money was becoming very tight for Mary, and she was making all of her many credit card payments later and later. She now resorted to asking her ex-husband to pay for more and more things, even though he always paid his child support on time. The worst part was when she didn’t have enough money to make her mortgage payments and it was becoming hard for her to get out of debt.
Her taxes had gone up, and a reassessment of her home showed that it was worth almost $50,000 less than a year ago when she bought it. This was the first-time she heard the term “underwater” on her mortgage. Creditors started calling all the time.
Mary is now in the process of getting her house foreclosed on, after only two years of ownership. Because of the amount of debt she owes and the fact that she has no means of paying all her creditors so as to get out of debt, she is now considering bankruptcy. She wishes so much she could have all the money back that she wasted on unnecessary items, including the cruises.
By: Catherine Achieng. Use this form to submit your story.
4 Attainable Tips on how to get out of debt quickly
It's amazing how easy it is to get into the habit or charging our credit cards and applying for loans in order to maintain a lifestyle that is way beyond our means. That eventually gets us into trouble. Before we know it we have too much debt. That in turn makes it harder for someone to have flexibility in our finances or to explore various opportunities. Remember, "it is always easy to get in debt but very hard to get out of debt."
Consumer debt is an issue that plagues millions of people and prevents them from obtaining financial health. Fortunately, there are many ways to reduce debt as there are to create it! A consumer must be determined to transform his or her finances. Without commitment to one’s financial plan, all efforts and possible benefits will remain unsuccessful.
Some of the methods one can use to get out of debt are the most obvious, but hardest to implement. The most effective way for one to get out of debt is for one to take control of one’s financial situation through careful spending and saving. This may seem like an easy step, but it is a prime factor that separates millions of people from their dreams of financial freedom. To gain control means to take responsibility for racking up debt as well, not by blaming a company’s high interest rates, or the recent sale at one’s department store.
When an individual realizes that he or she has absolute power over their financial situation, it opens the door to release from debt bondage. One can explore some simple ways to gain financial control. It is essential to develop a realistic portrait of one’s finances to determine current status.
1.) Tracking expenses
Keeping accurate logs of financial habits is a must. The few minutes it takes to balance one’s checkbooks and document expenses will help the consumer to move past debt in the least amount of time possible. Monitoring one’s checking and savings account will help one to see where his or her money is mostly expended. Pinpointing areas of one’s spending habits that consume the most amount of money can be gained from analyzing personal records and is essential to planning changes.
2.) Hunt for consumer deals (coupons and discounts)
One can search for consumer deals on his or her favorite products and switch brands to save money on commonly used items and buy in bulk. Those who regularly overspend when shopping should actively limit spending on each occasion, and should consider leaving extra cash and credit cards at home. Paying with a debit card helps to ensure that one won’t spend money that they do not have!
3.) Take a part time Job to earn extra income
Supplementing one’s income is a sure strategy to reduce debt. One can do so by finding a local part time job or pursuing online opportunities. This allows the individual to allocate spare funds strictly for the payment of debt, while one’s main paycheck remains available for regular living expenses.
4.) Seek legitimate professional help
If the idea of controlling all the pieces that goes to help you get out of debt seems daunting, one can enlist the services of a legitimate financial adviser. Debt consolidation is also an option for individuals who want to close old chapters on debt. For a nominal fee, one can enroll with a company that helps them to pay off debts completely, and are often able to reduce the overall costs.
Establishing creditworthiness through credit repair is essential to raising one’s credit score after debt is resolved. Once credit is reestablished, one can save it for special cases while reaping the benefits of a clear financial record.
Simple steps to get out of debt
Given the economic meltdown that scared most people around the world especially in Europe and America, ordinary folks are actively trying to pay their debt more than ever.
I’m sure you must be practicing common sense money and debt management principles like paying cash whenever possible and only charging your cards or applying for a new loan for purchases that are of absolutely necessity as opposed to engaging in prompt purchases for things you don’t need.
Whenever possible it’s always a good idea to pay off the balance on your credit card. This way you do not have the interest accumulating and compounding your debt to proportional levels that take it out of control and makes it harder for you to get out of debt.
Simplifying your life can help provide you with financial freedom again.
Unfortunately, sometimes things just won’t work the way we all plan. If you find yourself in a financial position that you can’t handle, there are organizations and legal procedures that can help you manage your debt more easily. So work at getting out of debt today, whichever way you need to. You will have more financial flexibility and freedom when you do exactly that.
Trying to Get Out of Debt? consider debt management program
how to get out of debt on your own