Debt Payment Tips

Debt Paying Tips

The statistics on consumers in debt is pretty staggering. According to The Federal Reserve, the average American carries over $8,000 in credit card debt alone. 36% of total debt is from revolving credit cards being used over and over again. 64% of total debt includes loans to cars, student education, boats, cars and vacation. Do you have debt you'd like to settle to become debt free? You need a plan of action to make those debt payments and this article will help you get on track to becoming debt free and to reduce the burden of debt.

You need a firm determination to become debt free and to stay focused on achieving debt free status to make it a reality. You can do it yourself without the help of a consolidation company which only increases the terms of your loans to drag the payments out even longer than they are now.

List Your Debts

Make a list of all your debts by gathering all your invoices and statements. Include everything that you owe any money on such as credit cards, department stores, gasoline cards, loans to banks and personal loans to others.

Add a column to the right side of your list for the due date for each bill.

Search online for a debt calculator. Type in the interest rate, monthly payment and this calculator will show you how long it will take to pay off your current debts if you continue to only pay what you are paying now. If you want to become debt free faster, you'll need to use debt payment tips and make larger payments to each creditor.

Vow to stop creating any more debt whatsoever. If you want to become debt free, this is an imperative step to stop creating more debt and digger a deeper hole that could take years and years to pay off. Do without anything that you don't really need ie. Food, shelter, clothing until you can pay off your debts and obtain enough cash to pay for future desired items. Write it at the top of your list of debts as a reminder for yourself.

Determine Your Income

Write down all the income you receive monthly including your job, tips and any child support. Total this figure and determine if you have enough income to pay all your current bills and debts.

If you have enough income to pay off all your debts:

Good! Decide which debts have the lowest total balance due and how much you could pay on that debt to pay it off. The sooner you can pay off any single debt will remove another bill that you are looking at every month. Paying off a lower balanced debt will feel good to remove it from your list of obligations and help you stay focused and determined to become debt free. Once the lowest balance is paid off in full, work on the next highest balance debt until you can focus on the largest one last.

If you don't have enough income to pay off all your debts:

Not good! This is the category that most people fall into. You'll either need to obtain another job that can increase the income you bring home monthly OR you need to find other ways to earn money. These could include:

Selling items you own on ebay or amazon

Having a garage sale or several until you sell off all unnecessary items you own

Ways to Save Money to be able to make debt payments:

If you don't have enough income to pay your debts, you'll need to find ways to save money on other things so that you can pay your bills. Here are some suggestions:

Reducing your cable television options or getting rid of cable all together until you pay off your debt

Switching to a lower cost cell phone

Getting rid of your land line if not used

Lowering your insurance amounts to what you actually need

Reduce use of electricity to save money – turn off all lights and appliances when not needed

Dress in layers at home to reduce the use of the furnace during cold months

Open windows in warm months and turn off the air conditioner

Use a clothesline instead of a dryer in warmer months

Cook all meals at home and avoid eating out anywhere until you are debt free

Pack your own lunch and water if you work out of the home

Avoid spending money on unhealthy, prepackaged foods like snacks, sodas that add a lot of money to your grocery bill

Cancel all memberships to gyms, tanning salons, magazine subscriptions

Drive a less expensive vehicle to reduce the monthly payment to car and insurance

Think of all ways you spend money and determine where you can cut back to save money that could instead pay a creditor

Save coins from each dollar bill that you spend and save in a separate area. At the end of every month, take this money to the bank and send this money to one of your creditors on top of your regular payment.

Call all your creditors and let them know that you are working on a new plan to pay off your debts. Ask them if they could reduce your interest rate or what would be required to do that. You could save a considerable amount of money when your interest rate is lowered by even a few percentage points. Creditors are happy to work with you when they know that you are sincere in trying to pay off your debt.

By looking at everywhere that you spend money and eliminating all these extra costs, you could have extra money every month that you could send to your creditors and become debt free much faster.

Use these debt payment tips to help you pay off all your creditors, relieve stress and potential arguments with your partner/spouse. You'll feel better and relieved when you are debt free and have money to save for emergencies, take a vacation, start a home business or other desire.

Good Luck with Using these Debt Payment Tips and I hope they help you!