Some of us cannot avoid to have debts. That is a very hard fact of life. Why is this happening? Well, there are various reasons for that. But the problem lies with the $10-dollar question: When can you pay off all your debts? Don't let yourself be a slave of debt.
Today, we are very much into "instant gratification." We want it-and we want it NOW. Well, for certain purposes, modern credit is a wonderful thing. But misused and overused, it can literally make you a SLAVE to it.
Most people do not understand the true cost of credit. If you finance, say a $500 stereo system on a credit card or plan, that stereo may cost you $680, $770, even $950 before you get it paid for. If you do that a lot, say with $5,000 worth of credit instead of $500, it will cost you at least $900 a year just to keep the interest current. If you go through life paying double what you should for everything you buy, it stands to reason you're not going to win the money game! A sure sign that you're e losing badly, by the way, is making only the "minimum monthly payment" on your credit cards.
If you are a slave to debt now, you should very seriously think about breaking those chains of slavery as soon as possible. If you are deeply in debt and unable to make even the minimum payments due on all your bills every month, you should probably get some professional assistance. Legitimate credit counselors can help you work with your creditors and devise a plan you can live with, to get your debts under control. Look in your city's Yellow Pages under "Credit" and find "Credit Counselors" or another reputable credit counselling and assistance organization. If in doubt of which organization to call, check with your local Better Business Bureau, your bank manager or your family accountant for a referral. If you're just mildly in debt, you will be able to reverse the process whithout help. One way or another, escape from high interest debt is a very smart financial move.
In fact, there are three simple steps to end slavery to debt:
Step 1:STOP doing whatever has gotten you into debt in the first place. If it is buying things on impulse, stop doing it. Lock your credit cards in a drawer and only take them out for a carefully thought-out purchase if you must, but don't carry them with you all the time. If it's living way beyond your means, stop that. Pull back. Do without if you must for a while. Delay major purchases. If there's a more serious problem, like drinking or gambling, get help. There is no shame in getting help for a problem. The shame is in refusing to honestly face your problems.
Step 2:Devise a plan to systematically reduce your burden of debt. After you pay yourself first, then take a pre-determined percentage of your paycheck and any an all other monies that come to you and use that to reduce debt. If you happen to own your own home or some other mortgageable asset and you have a lot of high interest consumer debt, like credit card debt, you may be able to use the equity in your home to get a debt consolidation loan, pay off a bundle of the high interest debts, and have a lower interest (i.e. lower cost) loan in its place. If you do this, though, you MUST avoid running up the credit cards all over again--even if you have to cut them in half and close the accounts to do it.
Step 3: Avoid taking on new debt unless it definitely IMPROVES your financial situation, such as incurring debt to buy a home and stop renting, or further your education, or move to a new city to take a better job, or to take advantage of a carefully chosen business opportunity.
Today, we are very much into "instant gratification." We want it-and we want it NOW. Well, for certain purposes, modern credit is a wonderful thing. But misused and overused, it can literally make you a SLAVE to it.
Most people do not understand the true cost of credit. If you finance, say a $500 stereo system on a credit card or plan, that stereo may cost you $680, $770, even $950 before you get it paid for. If you do that a lot, say with $5,000 worth of credit instead of $500, it will cost you at least $900 a year just to keep the interest current. If you go through life paying double what you should for everything you buy, it stands to reason you're not going to win the money game! A sure sign that you're e losing badly, by the way, is making only the "minimum monthly payment" on your credit cards.
If you are a slave to debt now, you should very seriously think about breaking those chains of slavery as soon as possible. If you are deeply in debt and unable to make even the minimum payments due on all your bills every month, you should probably get some professional assistance. Legitimate credit counselors can help you work with your creditors and devise a plan you can live with, to get your debts under control. Look in your city's Yellow Pages under "Credit" and find "Credit Counselors" or another reputable credit counselling and assistance organization. If in doubt of which organization to call, check with your local Better Business Bureau, your bank manager or your family accountant for a referral. If you're just mildly in debt, you will be able to reverse the process whithout help. One way or another, escape from high interest debt is a very smart financial move.
In fact, there are three simple steps to end slavery to debt:
Step 1:STOP doing whatever has gotten you into debt in the first place. If it is buying things on impulse, stop doing it. Lock your credit cards in a drawer and only take them out for a carefully thought-out purchase if you must, but don't carry them with you all the time. If it's living way beyond your means, stop that. Pull back. Do without if you must for a while. Delay major purchases. If there's a more serious problem, like drinking or gambling, get help. There is no shame in getting help for a problem. The shame is in refusing to honestly face your problems.
Step 2:Devise a plan to systematically reduce your burden of debt. After you pay yourself first, then take a pre-determined percentage of your paycheck and any an all other monies that come to you and use that to reduce debt. If you happen to own your own home or some other mortgageable asset and you have a lot of high interest consumer debt, like credit card debt, you may be able to use the equity in your home to get a debt consolidation loan, pay off a bundle of the high interest debts, and have a lower interest (i.e. lower cost) loan in its place. If you do this, though, you MUST avoid running up the credit cards all over again--even if you have to cut them in half and close the accounts to do it.
Step 3: Avoid taking on new debt unless it definitely IMPROVES your financial situation, such as incurring debt to buy a home and stop renting, or further your education, or move to a new city to take a better job, or to take advantage of a carefully chosen business opportunity.
