We all know by now that debt is considered to be one of the most common causes of stress in our lives today. With stress levels on the rise due to financial stress, many people are wondering how they can get out of the debt dungeon. Before we get started though, I would like to warn you that there are many debt consolidation tips and factors to consider, so we can’t cover them all in one article. It is important that you do more homework and research on your own after reading this.
When planning to consolidate you debt it is a good idea to speak to a financial counselor before you get started. A local non profit counselor in your nearby city is the perfect place to start. Before you take chances with debt consolidation companies do your research and study hard. Some of these companies may actually have you pay more than you owe, so be careful. When dealing with the issue of how to reduce debt there is a need for mental focus and discipline that you must have to persevere.
There are a few facts that you need to realize before you can make progress towards getting out of debt. You must understand that you are the cause of your own financial mess, and you can blame no one else for what you have done. People are so caught up on blaming others that they never come to the conclusion that they are the cause of their own financial ruin. It is also important to know that reducing your debt is a process and it will take time. So learn to be patient.
You should also consider placing you and your entire family on a well balanced budget. It is vital that you do not spend what you don’t have. In 2009, it was reported that the amount of overdraft fees on banking accounts was $37 Billion dollars. I hope you did not contribute to that! If you did, you have to learn the lesson of discipline and self control. Many people are addicted to shopping. Though it is not wrong to shop, if you spend money that you don’t have you will stay in debt.
When reducing your debt you need to pay more than you spend. Many people pay their credit cards on a monthly basis but end up spending more than what they paid. By doing this they end up breaking even and never making progress.
Here is an example: Let’s say you owe $ 1000.00 on one credit card. You pay your monthly minimum of 20-30$ dollars per month, but you spend $50-60 dollars on the same credit card every other week. There is no way that you will be able to reduce the debt. You are spending much more than you are paying. This is the trap that many people are tangled in so make sure you stay out of it.
I leave you with these last few facts:
- Take time to make a budget and stick to it.
- Do not spend what you don’t have
- Teach yourself to have self control.
- If you plan on going through a debt consolidation company study hard and do some research on the company before you make your decision.