Debt Views

In this turbulent and slowing economy, there are few steps that you can take that will be as beneficial as working to pay off your debt. Credit card interest rates are rising. The credit crunch is in full swing and the housing crisis seems to be deepening every day. As we roll into a recession, one of the best ways to prepare for your future is to work to climb out of debt.

1. Stop Using Your Credit Cards – Continuing to run up your credit card balance will only work to get your more and more deeply into the whole of debt. Depending on the debt load you are carrying, it could already take you decades to get out of debt. Even if you stopped using your credit card this second! Incurring more debt only proves to be detrimental in your attempt to change the tide and escape your debt.

2. Work on Getting A Better APR — Work on getting that better interest rate. Many times in my life this has worked for me…but it takes some effort. There are some important things to keep in mind when working towards that lowered rate. First of all, you will need to be on top of your payments. Chances are a credit card company will not work with you if you are not working with them! Also, remember to be pleasant. Think of the customer service operators who have to work eight hour shifts–and you can bet all their calls are not pleasant. Finally, be persistent. You would be surprised on what can be accomplished when you climb that supervisory ladder!

3. Create a Plan of Attack — Create a strategy to aid you in your debt reduction and STICK TO IT! There are many different approaches to debt reduction floating in the world. And I have created a worksheet to compare the different approaches. Whether it is the psychological benefits on a snowball-type consolidated monthly payments or it is paying off the highest interest debt first, the strategy here is to pick a plan and work towards the vision of debt elimination.

4. Save Your Money — All personal finance experts from Dave Ramsey to David Bach to Suze Orman talk about the importance of an emergency fund. Without an emergency fund chances are you will pull out the plastic whenever a financial crisis is looming. And when you are broke, everything is a financial crisis! So, take the advice of the experts and work to get $500 or $1000 in to an emergency fund before trying to aggressively pay down your debt.

5. Be Persistent — Persistence is the key. There will be downturns in your life. There will be successes, as well. But throughout it all, make sure to keep your spirits elevated and, above all, make sure to keep your eyes on the financial prize. That prize? Your financial peace of mind.

If you are in serious financial trouble, then turn to the experts or the government for help. As always, do not make any risky financial decisions without first consulting a financial advisor.