To take advantage of all the great advice you gave, I’ve compiled a list of the best debt elimination tips below. I hope it will serve as inspiration for those who are trying to get out of debt.
1. Take stock of all your liabilities, so you know exactly how much you owe to the world. Put them in a spreadsheet, with monthly payments, interest amounts, balances, and a running grand total of all your balances. Update it monthly as you pay off debt, and watch the overall amount go down slowly. It is very motivational.
2. Speak to a credit counseling service to help work out a plan: your “must pay” outgoings, arrange with creditors to freeze interest and accept a revised monthly payment. Warning: a reader informed me that using a credit counselor will show up on your credit report and adversely affects your FICO score — not as bad as a bankruptcy, but it is coded, and lenders can see it. Only exercise this option if you are really in dire straits.
3. Snowballs the debt – Pay minimums on everything, attack the smallest balance with all the extra cash you can assemble, then move on to the next one.
4. Be on the same page as your spouse or partner. Competing interests are suicide.
5. Keep trying and do not give up. Make a commitment, and if you are not getting out of debt slowly but surely, revisit that commitment. Change is difficult and it takes drastic change in mindset and behaviors to get out of debt. Anyone can do it – as long as you really want to do it.
6. Maximize your 401K contribution. Every time you get a raise, increase your contribution by 1-2% because you will not miss the extra money if you do not ever see it.
7. Read personal finance books, publications, and blogs. Self-development blogs like this Zen Habits are also great.
8. See yourself as completely debt free. FREEDOM! What is that going to feel like? Imagine it.
9. Find free or low cost entertainment. Check the local newspaper, or look online and see what upcoming events are going on. Many towns have free concerts in local parks, the local libraries often have fee arts and crafts classes, get a state tourist guide and see what is going on in your area, and be a tourist in your own town.
10. Credit documentary. Watch the PBS documentary about credit card companies. Get mad, mad and start hating the credit industry. They are enabling you to do some terrible things to yourself. Cut up your cards and pledge to never use them again. It is a form of slavery.
11. Oprah. Great advice on Oprah’s Debt Diet along with great forms to help you find out where you are and plot a course out.
12. Read the book: How to Get out of Debt, Stay out of Debt and Live Prosperously by Jerrold Mundis. Once you have read it, read it again.
Making the decision to get out of debt is a wise choice. Follow these debt elimination tips and you will be surprised how fast you will be debt free.
Joseph Hernandez is the CEO of Debt Free Solutions, a debt consulting agency located in Long Beach, CA. His organization was created in October, 2000. His revolutionary debt program is like no other. Unlike other debt elimination programs, he drastically reduces the risks that are inevitable with all debt negotiation programs. Hence, his clients may be able to get out of debt fast-and safe.
Stop wasting money by making minimum payments. See how our revolutionary debt negotiation program may get you out of debt fast and safe!