Lower Your Debt for a Better Life

Life is full of many choices. Unfortunately, many of these lead to a stack of bills and an escalating pile of debt. Gone are the days when mom and dad saved up for every purchase and waited until they could pay for it in full. Instead, most families have enlisted in the 'buy now and pay later' philosophy that seems to have invaded our society.

Even if you are too young to remember when cash was the main vehicle for making a purchase, and credit cards were something new, imagine what it would be like not to have a different credit card bill arrive with your mail every week. Imagine what it would be like to have the salesclerk ask you if you will be paying with large bills or small ones instead of hearing the clerk ask which credit card you are going to use. Better yet, imagine what it would be like to have the freedom to whip out a wad of dollar bills to pay for your purchases instead of applying for a new store branded credit card.


In fact, if you were able to avoid using your credit card to pay for your purchases, you might actually end up saving money in the long run. Imagine what you can do with all of that extra cash that you no longer have to put towards the interest charges that you have accrued or the late fees that accidentally creep into your credit card statements.

Eliminating installment loans, car loans, and home equity loans from your life can also save you scads of money. After all, every time you acquire a new loan, part of the monthly payment goes to the principal and part of it goes to the interest charged against the loan.

How do you go about cutting your reliance on credit out of your life? The first thing that you need to do is to begin paying down your loans and credit card debt at an increased rate. Make a larger monthly payment than the suggested minimum, putting as much additional money towards the debt as you can. Resist the temptation to acquire a new installment loan just because you have finally freed up some monthly income.

In order for you to continue eliminating debt from your life, you need to avoid using your credit cards for every purchase that you make. Set yourself a minimum amount for credit card purchases. Anything under that amount should be paid for with cash or by check. This strategy is very effective in lowering your credit card debt, provided that you follow it consistently.

Continue to pay down your credit card bills, reducing the ones with the smallest balances first. Attempt to do this for all of your credit cards, including the ones for specific stores such as department stores and home improvement stores. Set yourself a goal for eliminating a specific number of your credit cards by a specific date. If you plan to eliminate debt entirely from your life, plan to reduce the number of credit cards that you hold to a maximum of two. Plan to use these two cards only for purchases that you can afford to pay off in full as each monthly statement arrives and for emergencies.

Next, once you have managed to reduce some of your credit cards to zero balances, cut up the cards and throw them away. Cancel these credit cards and continue working on lowering the balances on your other cards. With each credit card that you eliminate, you should experience a small surge of available or ready cash. The less you have to pay on interest charges for your credit cards, the more money you can place into your wallet for al of those smaller purchases.

It's important to realize that eliminating your debt due to credit cards and installment loans is not going to be an easy task; nor is it going to be a quick one. Therefore, you should go into it gradually and realistically. Small changes will eventually lead up to bigger ones. Moreover, eliminating your financial debt will liberate your finances in a most effective way.

In fact, with the realization of your goal and the elimination of the majority of your loans and credit card debt, the amount of your liquid assets will continue to grow. No longer will you be tempted to pull out one of those plastic tickets to easy purchase, but rather, you will be glad to extract a few dollar bills from your wallet to pay for your purchase while leaving twice as much cash in it.

If you need extra motivation, decide upon a reward for yourself that incorporates both the elimination of your debt and the reduction of your arsenal of credit cards. Buy one of those oversized glass containers and empty your wallet into it once a week before payday. You might be amazed at how motivating the sight of green and silver can be.

Additionally, you might discover that your strategies to lower your debt have actually produced a small windfall of unexpected cash as well. Once you eliminate the ease with which you purchase items, you might discover that you become more selective in the purchases that you do make. Consumers typically indulge in a number of impulse buys when shopping. They purchase more food than they need if they shop when they are hungry.

They overspend when they are depressed or have had a bad day. Plus, they often buy things that they don't really need and only seem to have wanted during the thrill of shopping. If you take a moment to think about it, you probably know that you have something in your home that you purchased, that you have never used, and that you should have returned but didn't because you lost the receipt.

In addition to eliminating excessive credit card use and loan acquisition from your life, it is possible to lower your level of debt even more by following a few of these strategies:

• Only purchase things that are on sale.
• Request a discounted price on damaged goods.
• Use coupons whenever possible. Coupons can be found in newspaper inserts, store advertisements, and online.
• Take advantage of as many free activities and events as possible, especially if you have children.
• Never charge anything but necessities. Luxury items should be purchased with cash or not at all.
• Coordinate your errands into one trip. Never spend more on the gas it takes to go to the store than on the item that you are picking up. For example, is it really worth spending four dollars on gas to get a dollar movie rental?
• Shop around to locate the supermarket with the lowest prices in your area.
• Visit the local dollar store and see what's available that you can use.
• Raise the deductibles on all of your insurance policies. Check your policy coverage to make sure that it is correct.
• Shop around for your insurance needs to get the lowest rates.
• Avoid making long distance phone calls unless you have free minutes on your cell phone plan.
• Swap services with friends and family rather than paying someone else the going rate.
• Use the Internet to communicate with friends and family whenever possible to save on postage and telephone expenses.

Once you begin to look for savings and to take advantage of them, you will see your cost of living decrease. Follow the strategies that make the most sense for you in order to maximize your savings. Every little bit helps.