Get Out, and Stay Out, of Debt!

Get Out, and Stay Out, of Debt!

Being in debt is more than just a financial condition; it has become a way of life. Many people have been in debt for so long that they do not even consider that there are other ways in which to operate financially. For them, making ends meet involves the use of credit which creates, needless to say, more debt. In actuality, all that may really be necessary would be to practice a bit of self-discipline where their spending habits are concerned.

Debt reduction (or as it should be called, debt extinction) should be a major component of every prudent financial planning program. You want to enter your retirement years free of all encumbrances, not worried about how you’re going to continue to make your payments. And debt freedom will, needless to say, make any planning or investment program more efficient. That is why it makes financial sense to pay off your debt (certainly you high-interest credit cards, at least) first. You will be saving dollars that you would have to pay for servicing the debt later on. And in this case, saving money is the same as making money. You can use all or part of what would have gone to paying off the debt in another more profitable investment vehicle.

There are numerous debt management strategies available, depending upon the severity of your own situation. Closely examine your financial condition. Do you have money left over after all of your debt-servicing is done, or are you just barely making the minimum payments necessary? If you have additional money, put more of it toward your debt. If you don’t, find ways to possibly cut your expenses, or ways to raise more money. Use your income tax refund to pay down your debt. Get a part-time job for more income. Sell some used items. You’ll be surprised at the options that are available once you begin to think about them. Of course, if you are truly in debt over your head, you may want to consider a debt management counselor or company.

Of course, any debt-reduction strategy that is not based on a solid, realistic budget is not worth the paper that it’s printed on. This is the step that many people neglect. A well thought-out budget is itself a strong defense against the creation of more debt, especially with credit cards. It forces you to live below your means, which is a completely opposite mindset from the one that many people have. Living below your means will free up additional money to pay off your debts sooner. And once you get used to living below and not beyond your means, you’ll be surprised at the amount of money that you didn’t even know that you had.

Getting out of debt should be one of your highest priorities. Make a firm decision to gain control of your daily financial circumstances. Analyze your situation; tailor a budget and debt reduction plan to meet your needs. Remember, it must be doable. You didn’t get into debt overnight; give yourself time to get out of it. But develop a strategy for eliminating it, and implement it. Then you’ll be much farther along on your road to financial freedom.


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