debt

Avoiding Credit Card Debt Before it Sneaks up on You

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In this modern time where the economy has been such a challenge for everyday people like you and me to keep up, it’s easy to get into credit trouble when your credit bills begin to stack up. So, if you are in the position to just start learning the ropes of the world of credit cards, there are a lot of things you can do to avoid credit card debt before it sneaks up on you and keep your nose clean, as they say.

This is an outstanding goal for you if you are just getting your first credit card. If you know or talk to anyone who is battling tens of thousands of dollars of credit card debt, you know what a jail sentence it can be. Once that credit card debt gets that high, the time it will take even under the best of conditions to bring it down runs into the years if not decades. And for all that time, thousands of dollars of money go down the drain to credit interest that doesn’t buy you any food, tickets to the movies or new clothes. It just goes away with no value to you at all.

If you are new to the world of credit, getting a credit card is a good thing. But once you get one, keeping it under control is job one. You will find it amazingly easy to use a credit card once it comes. In fact, the retail world makes it difficult to conduct transactions any other way. You can pay for gas at the pump that way and even charge your groceries at the grocery store. And while all of these great uses for credit are helpful, you can end up with a whopper of a credit card bill at the end of the month. And if you don’t pay that bill off, that is the first step on a lifelong jail term in credit card debt jail.

There are some guidelines you should follow to both use credit responsibly but also to keep building your credit rating which has a real value to you. Remember that what the credit card companies don’t tell you is that making a charge on a credit card is a loan. Even if you just charge ten bucks to go to the movies, you took out an unsecured loan to finance that movie ticket.

So once you start using a credit card, keep in mind that you will be paying back everything you run up on it. It is NOT free money. A good practice is to save every receipt every month and keep a running tally of what you have spent on credit. Not only can you use that to cross check your credit card, it keeps you honest because each time you add a charge to your credit card, you can update your tally so you know for certain that you will be able to pay it off when the bill comes.

Paying off the credit card each month is the number one best way to keep your credit problems under control. Now it isn’t a bad idea to let a little bit of the debt drift from month to month. This builds your credit history and credit rating which will pay you well down the road when you want to buy a larger purchase. But by staying on top of your credit and what is going onto your card, you will start out with the kind of habits that will lead to a life of good credit use without credit card jail. And that is a wonderful gift to give yourself early in life.

Frugality Can Equal Happiness

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Frugality and happiness aren’t something society usually puts together. Frugality often brings up images of great sacrifice. We think of the miser who lived in poverty only for others to find millions saved after the miser passes away. What was the use?

Frugal living isn’t necessarily what you may possibly consider it to be. Frugal people live very happy lives. They find happiness in meeting goals, reducing their financial burdens and living stress free.
How happy can you be when you are drowning in debt and struggling to make ends meet? You aren’t living frugally, but you aren’t happy either.

The frugal person often sees each step towards being debt-free or early retirement as a great success. They don’t focus on that outfit they didn’t buy or that new car they aren’t driving. They focus on having spending money left over at the end of the month. They focus on the things that really matter.

Frugality is also a huge challenge. You get to be very creative with your money and the way you live. Many people love moving from one thing to another, looking at the way to cut costs for each category. For example, you’ve cut your utilities, now what about your groceries or gasoline consumption?

The goal is what keeps the frugal person going. The daily victories and challenges keep them interested. The penny saved keeps them adding it all up. And the debt free life keeps them stress free.

Imagine a life where you have no debts to pay. All you have are your living expenses. Think about having two thousand extra dollars a month. Dollars that aren’t already spent before you make them. Think about retiring early to do something you enjoy instead of something you have to do. Think about following your dreams. Think about having money left over each month.

Frugality will get you there. Now wouldn’t that make you happy?

5 Steps To Credit Card Debt Reduction And Money Saving With A DIY System

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5 Steps To Credit Card Debt Reduction And Money Saving With A DIY System

 

Have you succumbed to the lure of credit cards and found yourself in a bit of a pickle because of it?

Pull up a chair and have a seat – Welcome to the ever growing club of consumer debt. Your biggest challenge now is to dig yourself out of this situation and avoid having to pay anyone to help you do it.

The options at this stage are usually as follow (depending on the level of credit card debt):

• Consolidate into a loan.
• Debt Management.
• Bankruptcy.
• Do Nothing.
• Just pay off the cards over as long as it takes.
• Make the minimum payments and keep spending.
• Make an effective DIY plan.

The more popular solutions – such as consolidation loans and debt management -we see being touted everywhere are the ones that put your money in other people’s pocket. I don’t know about you but for me becoming free from debt should not involve spending more money, or *borrowing your way out of debt*.

So how does a DIY system work?

To break it down into 5 steps it looks something like this:

1. Address your spending habits and why you are in this situation.

To ever win with money and have a comfortable financial future you have to control your money – not the other way round. Take complete control and set yourself some realistic yet desirable goals for the future.

2. Know your options, the ins and outs of how they work – and why they are not for you.

Along the way you will be tempted by quick fix ‘make it all better’ solutions like consolidation loans and debt management. As mentioned already there is a multibillion dollar industry making a very healthy profit from consumer debt. Your DIY plan does not involve *paying to get out of debt*.

3. Know your situation.

Any debt relief system requires a bit of budgeting. As long you’ve followed the rest of the plan so far, have desirable goals and no intention of taking an easy -and expensive – way out you won’t have trouble budgeting.

The other thing to know is your credit score. There are a staggering amount of mistakes found on credit scores that result in people paying more interest than they should. If you are eligible for lower rates and 0% APR cards to move expensive balances on to – you need to know about it.

4. Minimise outgoings, Maximise income and leverage your cash flow.

If you could be paying less for utilities and day to day expenses you should. There is a very fine art of money saving that you will become very good at if you’re going to be successful at this.

Home economics, consumer education and bargain hunting can save you incredible amounts of cash that can go toward paying off your debt quicker.

If you’re really serious you can take it a step further and create a secondary source of income. Be it a second job, or using a natural skill/strength you have that can earn you money in your spare time.

With the opportunities available online it’s never been easier to find those who are seeking out some knowledge, experience and skills that you have and that they would pay you money for.

5. Form your system and put it into action.

Having followed the first 4 steps and laid some sturdy foundations you are now in a position to develop a quite powerful ‘snowball’ plan. That is a system that gains momentum as you execute it.

This step is completely dependant on the first 4 steps and generating an extra figure that you can assign to snowballing your credit card debt. As the debts get paid off the figure grows and subsequently clears the rest of the debts a lot quicker – saving you a tidy amount of interest in the process.

It is very possible use a DIY plan and enjoy great success from it, yes it takes a bit of hard work and discipline on your part but the alternatives just cost you more and keep you in debt for longer.

It’s your money, it’s your life – if you want to truly own them both then you have to take control – not give it over to someone else. Control or be controlled, the choice is yours.

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