Getting Rid of Debt - Weigh your Options

Many people have debt that they would like to be rid of, but most don't make a step toward doing anything about it until they begin getting threatened by credit card companies, phone calls, collection services, etc. Sometimes they still don't really pay attention or do anything about the problem.

If you would like to take steps toward getting rid of your debt, here are a few simple things you can do to start now:

1. The first step is acknowledging the problem. Make a promise to yourself to do something about it, no matter what size the debt is. This is the first move you need to make.

2. Sit down and calculate how much income you really have each month. This is pretty easy to do if your income is a set amount each week or month, but if you are self employed or have money coming in from different sources, you need to know exactly how much that is.

3. Make a list of your weekly or monthly expenses. List each and every expense - regular payments such as car and mortgage, and varying expenses like utilities, groceries, gas and food. Use realistic figures so that you come up with a number that is very close to what you would normally spend each month.

4. Now make a list of the expenses you incur each week or month that are not necessary. These may include dining out, entertainment, or shopping. Also include such small things like that donut you buy each morning on the way to work, a soft drink you get out of the machine at the office - include every single expense you can think of, no matter how small.

5. After you combine your regular and non-essential spending, is there normally any money left over? Sometimes when there is still money in your account, you will think of something you need (though you probably really don't). If it isn't an absolute must, leave that money in the bank.

6. A great way to pay down your debt is to use the money left in your account to pay down the debt with the highest interest rate. This is one option, but whatever you choose, pay on SOMETHING - this is the only way you will ever get rid of your debt. You must have a strong commitment to paying off your debt.

7. Filing bankruptcy is necessary at times, but unless you are forced to use this option it is best not to. Bankruptcy does have longterm drawbacks - it stays on your credit report for years, preventing you from making any type of major purchases easily.

8. Debt consolidation can be something to consider, but don't automatically choose this route. Sometimes you are just replacing many monthly bills with one consolidated bill with slightly lower interest. This is not really saving you much money, and you have to think about what the impact on your credit rating will be if you choose this method.

9. Carefully choose and consider the options when deciding to eliminate your debt. Remember that it will take some time, but make your best effort each month, pay extra when you can on high interest bills and cut down on any unneccessary spending. In a short time, your debts will be much lower, and your stress level will improve greatly!