How To Reduce Debt?

Stop The Debt Cycle

Debt can be a stressful and difficult cycle.  Although you hear that you should make more than the minimum payments each month, you may be struggling just to make the minimum payments.  You may lose sleep worrying about bills, feel as though you will be in debt forever, or be receiving telephone calls from collectors.  The debt cycle entraps plenty of good people – after paying your bills, you have no money left over, so you charge the groceries, the oil change, your child’s school supplies, and then you continue running in the loop of the debt cycle.  The following are tips to help end the debt cycle and reduce your overall debt.

Tips To Reduce Debt

1.) Stop making new debt! The only way to end the debt cycle and reduce overall debt is to stop creating new debt.

2.) If at all possible, take on a part-time job.  Even working an extra ten hours per week will significantly increase your budget.  Services such as Craigslist even have ads for people that are looking for one time work, such as raking leaves, painting a room, or cleaning a house.  Use this money to pay down your debt.

3.) Redefine your idea of necessities.  As harsh as it sounds, a mobile Internet plan is not a necessity.  Neither is gourmet chocolate, dinners out, or a new outfit.  Oprah highly promotes the “30 Day Debt Diet” where you only purchase absolute necessities for 30 days.  Use that extra money to pay down debt.

4.) Downsize.  Can you trade in your car for a cheaper model?  If you own a Blackberry, can you sell it on Ebay and go with a simpler phone for the next year?

5.) Sell things you don’t want.  Have a garage sale, use Ebay, or sell things on Craigslist.  Clearing out your home will give you mental clarity as well.

6.) If you have tried all of these options and it doesn’t work, consider getting the help of a professional.  A consumer credit counseling agency can be your advocate in setting up a realistic budget, possibly lowering your monthly payment, and developing a budget to get you debt-free.

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