Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I am suffering from lots of debts.. But now i want to live my life debt free, so please suggest and me and tell me any tips that will get me out from such type of debts.
Thanks!
Tally up your bills every month... your minimums. Include your housing and utilities. Divide that by 4 and set up that amount to go into one checking account. The remainder will go into a second checking account, which you'll pay for everything else with. The stricter you are with that, the faster you can pay off debt... anything left at the end of the month (or the week, if you can't trust yourself with using it up) goes toward an emergency fund (at least $1000.) It can remain there - a balance of $1335 is really a balance of $335. Once you have an emergency fund, anything over that goes toward snowballing your debts. Go to whatsthecost.com and click on "Snowballing." Play with paying it down by balance or by interest, whichever you think will help you more. Print out that schedule and hang it up on your fridge. Print up another and fold it into your wallet, around your debit card. Keep all credit cards at home, frozen in a block of ice. And stick.to.that.schedule. Anytime you get extra money, throw it into your snowball and print an updated schedule.
Every morning imagine you are debt free. If you think you "need" something think to yourself.. gadget.. debt free.. gadget.. debt free. Believe me if you are debt free you will have peace of mind and might even be able to pay cash for gadget.
I don't have a lot of debts but I have lots of accounts. I've been trying to figure out a way to get them all in one view. I ran into intuit's mint.com (free) a few days ago and it brings into a single dashboard view all of my accounts; including credit cards and loans. It also automatically guesses a starting point for a budget which you can adjust. Knowing where your money is going, debts and a budget are three things that help debt reduction. So I figure I should mention it. I know for me, its a lot easier to keep my expense in check if I keep my finances front and center... avoid "out of sight out of mind". I just started using it but so far I'm impressed.
I am suffering from lots of debts.. But now i want to live my life debt free, so please suggest and me and tell me any tips that will get me out from such type of debts.
Thanks!
1. There is probably no way to get out of this mess without getting out of your comfort zone. Spending less than you're used to and/or finding ways to make more money almost always mean doing something you haven't done before=uncomfortable.
The quickest way to create additional income for yourself and relieve debt is to sell your car, move closer to work, bike, walk, or ride the bus. Commuting eats up an insane amount of American paychecks (as does the insurance and car payments).
Tally up your bills every month... your minimums. Include your housing and utilities. Divide that by 4 and set up that amount to go into one checking account. The remainder will go into a second checking account, which you'll pay for everything else with. The stricter you are with that, the faster you can pay off debt... anything left at the end of the month (or the week, if you can't trust yourself with using it up) goes toward an emergency fund (at least $1000.) It can remain there - a balance of $1335 is really a balance of $335. Once you have an emergency fund, anything over that goes toward snowballing your debts. Go to whatsthecost.com and click on "Snowballing." Play with paying it down by balance or by interest, whichever you think will help you more. Print out that schedule and hang it up on your fridge. Print up another and fold it into your wallet, around your debit card. Keep all credit cards at home, frozen in a block of ice. And stick.to.that.schedule. Anytime you get extra money, throw it into your snowball and print an updated schedule.
I did something like that when I lost my job back in 2002. In several years I had my debts paid down to $2,500. $11k paid down to $2,500 on $300 a month coming in. Every lump some went to pay down debts. Now I am debt free.
First cut what you can. Cable, smart phone, eating out, meat, ice cream, Starbucks, anything else that you don't need to live on. Do not buy anyone presents for anyone, including yourself. sell a high priced car, only if you can eliminate the debt from the car. If you owe more on it than you can sell it for then the decision is not one I can make for you.
After cutting your exspenses you need to create a budget. You know what you pay for rent or mortgage, electricity, gas, water, or what ever else it takes to keep a house over your head. Figure out what it will cost you to make your own food at home. Make sure that you use real food. I for one love potatoes and a 10lb bag of potatoes can go a long way. Packaged food cost way to much for someone that wants to get out of debt.
Remember to put a percentage of your income in an emergency fund.
After your living exspenses and saving fund are taken care of find out what is left over. This is your debt reduction money. If it looks meager then you can consider getting another job or a better job. If you end up getting a better job take a percentage of that and add it to your savings. The remainder place toward your debt reduction fund.
If you end up getting a second job remember to make sure that you file single and no dependends on your W2's. You are not in a position to have to come up with money to pay taxes. On the second job I would devide the income like this: 20% is for keeping up with the job, transportation cost food at work. 40% goes to savings and 40% goes to pay off debt. That savings keeps you from getting deaper into debt. Once you have a 3 month supply of money you can place the 80% of the income toward the debt.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
