For some, getting out of debt may seem like hard work. But with discipline and a serious plan it is more than possible to manage all that is owed, and actually pay that total amount down to be able to enjoy a future without the financial burden of debt.
When looking at ways to get out of debt, the first thing is to set a realistic budget. This means that as a family all spending and earnings after taxes need to be written down. Once this is done it is easier to see where money is being spent, and where expenses and extras can be cut.
This may mean that Friday nights no longer mean going out to dinner, but rather eating at home. And instead of constantly renting movies or going out to the movies, those movies may now end up being borrowed for free from the library.
Other tips for saving money could also be cutting coupons, looking through store circulars for deals on needed grocery items and bringing lunch to work instead of buying takeout.
Then, once a budget is set, a person or family with numerous credit cards should look into debt consolidation, which rolls all of the multiple debt payments into one payment. This helps because often those with numerous credit cards forget to make all of their payments on time, which leads to late fees. With debt consolidation payments are due on just one day out of the month, and not multiple different days.
In addition, when people have multiple credit card payments, they tend to just make the minimum monthly payment on each one, which means that more money is going toward interest without reducing the principal amount owed. This can lead to a lot of wasted money on interest for a person making multiple payments each month on several different cards.
Source: Fox Business, “Getting Out of Debt: Easier Said Than Done,” Howard Dvorkin, 13 June 2011