We often hear and read about how people get into debt and how bad being in debt can be. After all, having more debt than you can afford to pay off can be very stressful, both financially and emotionally. However, what you very rarely hear about is why getting into debt may actually be a good thing; and how easy it?can be to get out of debt? as long as you make a plan to become debt free and stick to it.
Getting into debt can actually be a good thing because it's a lesson that teaches you how to be financially responsible, and it also forces you to learn essential money management skills.? I can almost guarantee that if you have ever paid off a large amount of personal debt, you have definitely learned from your mistakes.
If you get into debt at a young age ?when you have less financial responsibilities? the burden of being in debt can be less stressful than if you have a family, a spouse, and children who are financially dependent on you. Getting into debt happens, it's a lesson to learn from and it's OK. And some debt is actually good, especially if it gives you something solid in return, such as an education with student loans or a home with a mortgage loan.
The point is, if you have debt the burden doesn?t have to consume you and your life.? Getting out of debt is just like any other goal, in order to achieve your personal goals you have to set a realistic plan and you have to stick to it until you reach your target. Unfortunately, not everything in life can be planned, so if life throws you a financial curve-ball while paying off your debt, then you may have to adjust certain aspects of your debt repayment plan, such as your payment amounts or your debt free target date. To help with your plan, here are a few quick tips to get you started.
Set Up Regular Automatic Payments. Having automatic transfers from your checking account to your credit cards, lines of credit, or loan payments makes sure that your debts are being paid regularly and on time. If you rely on yourself to make your debt payments you may make excuses to spend the money on something else.
Make Biweekly Payments. Making payments to your debt every 14 days instead of once a month will help you save on interest and pay off your balances quicker.
Increase Your Monthly Income. The fastest way to pay off your debt is to make larger payments towards your debt.? You may have to get a second job for a few months or years until your debt is paid off, but at least your debt will be paid off faster.
Negotiate Your Interest Rates.?Not all banks and finance companies are cold-hearted, some of them are compassionate and willing to work with you. If you are experiencing financial hardship call your bank and ask them to lower your interest rate, you never know...they may just do it.
Of course, these tips are helpful for people that are looking for a way to get out of debt on their own ?"Do-it-Yourself" style.? However, if you're in a significant amount of debt, that's obviously overwhelming and see no way to meet your financial obligations, you may want to consider contacting a consumer credit counseling service for help. Not all consumer credit counseling services are good, so be sure to choose a legitimate non-profit service by verifying that they are a member of the National Foundation for Credit Counseling or by calling 1.800.251.CCCS.
Consumer Credit Counseling Services can help you evaluate your debt situation and help you work out a budget to pay off your debt. And, if it's completely unrealistic to do, they can also advise you on whether or not you would be a good candidate for a Debt Management Plan (DMP), or in the worst case, fit for bankruptcy. Not an ideal situation, and definitely an option of last resort ?but sometimes, it's the only option left.
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Kristina is a Financial Services Professional with over 12 years of experience working in the Banking Industry. Kristina has a Bachelor?s Degree and she is also a Certified Financial Planner. She enjoys helping people plan their personal budget, pay down their debts, and enjoy their financial lives. Related Stories:
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