Getting Out Of The Red And Into The Black
To eliminate debt, you need a strategy and patience. Yes, there’s a lot of hype right now about erasing debt instantly and painlessly. Unfortunately, unless you come into a windfall of some kind, this isn’t likely to happen. With some thorough planning, though, you can eliminate debt and stay that way.
The first step that you have to take to eliminate debt — sorry, you really have to — is to consider getting rid of your credit cards. Because there’s no way you can eliminate debt if you’re still using charge cards to make purchases. And having them around is just too tempting. Emergencies do happen, so you may want to keep one, but put it in a safety deposit box—and not in your pocket.
Next, you want to double your minimum payments to eliminate debt more quickly. This not only makes it possible for you to pay off your bills twice as fast, it decreases the overall interest you pay. This saves you an enormous amount of money that you often don’t even realize you’re spending because those minimum payments are kept so small. Believe me, though, it adds up to a lot of money over a period of time.
Now you want to take the big step to eliminate debt — change your spending habits. Identify your true needs as opposed to your really, really want to haves.
Ask yourself important questions such as:
- Do I really need all these cable stations?
- Are all these extra phone services like call waiting and call forwarding necessary?
- Do I really have to have a cell phone, and if I do, do I have to have email access and all the things that are driving the cost up?
- Would a different, less expensive cell phone plan be just as good?
- Are the weekly massages and manicure absolutely needed?
- Can I buy generic products and groceries rather than brand names?
- Do I have to eat out so often and in such expensive restaurants?
And now for the last step to eliminating debt: after you’ve asked yourself some hard questions about your spending habits and separated wants from needs, make a budget. Be realistic in your budget expectations, but if you’re going eliminate debt you need a budget—and you need to stick to it. This way, you cannot only get out of the red and into the black — you can stay there.