Worried about your financial future? Is your debt situation keeping you up at night?

Learning how to manage and reduce debt can be essential to making the most of your finances.

Here are some time-tested strategies to help you reduce your debt and make a more secure future.

Things You Will Need

Set a financial goal.

Avoid spur of the moment purchases.


Step 1

Pay your bills on time - A single late payment could result in lowering your credit report and paying much height interest rate on any future loans.

Step 2

Cut up your extra credit cards - This will reduce your temptation to spend on unnecessarily items. Two or three active cards should be plenty.

Step 3

Set up automatic payments on your major bills - This will enable you to element late payments. Banking on line is actually very easy and safe. The sooner you can show lenders you're back on track the better.

Step 4

Increase you payment by at least $10 a month -This will help you pay off the balance few years earlier. You can try the calculator at http://www.federalreserve.gov/creditcardcalculator/ to see how much sooner you can get rid of your debt by paying a little more every month.

Step 5

Reduce your credit card interest rate - If you pay your bill on time and the credit card company still lower you limit or raises your interest rate, explain to them that you are thinking of taking your business elsewhere. You may get a rate reduction.

Step 6

Get your credit report free - Get your reports from annual credit report.com which is sponsored by Federal Trade Commission and it is FREE. There are other sties that offer "free credit reports" but actually are trying to sell you services.

Step 7

Pay off your high interest bebt with your savings - Paying off credit cards with an interest rate of 13 percent is equal to earning 13 percent interest on your money after tax.

Step 8

Pay more on your mortgage - If you've paid off your credit cards and other high interest debt paying an extra payment each year on a 30 years fixed rate mortgage can save you roughly 20 percent off the total interest you pay.

If you think you have too much debt, putting a plan to lower your debt is essentials. It will not only make your finances easier to manage it will improve your credit too.

Tips & Warnings