How To Pay Off Bills And Get Rid Of Your Debts
If you owe a higher amount of money than what you make every month, it might be intimidating. However, there is a solution that can help you get out of this debt trap and relieve your stress. These cost-cutting steps can assist you to reduce your monthly expenditures which would offer you more money that you can utilize towards paying your debts. Patience is the key here and you would gradually get rid of all your debts. Just follow the simple steps given below that would help you know how to pay off bills and can show you the path towards debt independence.
Some Useful Techniques To Pay Off Bills And Get Rid Of Debt
Work out the overall amount that you’re obliged to pay all your creditors. Then divide the overall amount due (taking interest into consideration) by the number of years you intend to take for paying all of your debts (for example, $200,000/10 years = $20,000 yearly/12 months = around $1667 monthly). This would provide you a clear idea about what you have to pay on a monthly basis besides your day to day living expenditures for the purpose of paying down your total debt by a stipulated date. Living expenditures incorporate items like utilities and fuel for your car. In the instance given above, the debtor intends to pay a debt amount of $200,000 in 10 years. He would require $1667 besides his day-to-day living expenditures and other various expenditures to attain his objective.
You should not make needless purchases such as boats, video games, shoes and garments. You should keep in mind that your objective is to become debt free and not to fall back into debt. Destroy your credit cards or discontinue them. If you can’t afford to make cash payments, don’t buy anything.
Devise a practical budget. Determine what is not essential for your daily living that would save money that can be used for paying down your debts. Stop going to watch movies every month. Cut off your coupons. Join a carpool and save on your fuel costs. Carry your lunch rather than eating out. Do your shopping at a departmental store to avoid numerous trips to save fuel. Fix and apply a programmable thermostat for air conditioning and centralized heating and this would help you save 10% on your utility bills. Have a water filter at your home to save the expenses of purchasing mineral water bottles.
The funds that you can save every month by lowering your leisure expenses or eating out and so on must be utilized for paying off your high-interest credit card debts and other debts faster. As soon as you pay off a debt, utilize that money for paying down another debt with a big interest rate. If you double the payment every month, it would allow you to repay that debt promptly. Continue with this plan till all your debts are repaid.
Contact your credit card companies and bargain with them for cutting down your interest rates and if you can, go for a balance transfer.
Look for fixed rate policies from your utility companies. Fixed rate policies offer savings on occasions when prices usually go up. This form of policy assures one rate for a particular time span. This offers you the sense of security that your utility bill would stay unchanged throughout that phase and this allows you to follow your budget.
Many Thanks to Jennifer Lohan for the above guest post.
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August 25th, 2009 at 11:20 am
Credit card debt is one of the deadliest things on the plant. Its best to save and buy rather than buy and save.
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Cute Graphics Reply:
September 21st, 2009 at 12:49 am
I agree, credit card debt is by far the worst thing you can do.
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August 27th, 2009 at 8:16 pm
I think these are very good advices. Number 1 thing to do when you have debt – is cut some of your unnecessary spending habits (for the time being) and just try to pay off the debt as much as possible.
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August 29th, 2009 at 1:32 am
I’ve just started a series of posts on this subject, and as proof I didn’t get the idea from you, I’m just now getting here and seeing this post. Great minds think alike.
And I think I’ll say enough things differently than you did so that no one will think I copied you. I hope you stop by and comment on it every once in awhile. Great stuff here.
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September 2nd, 2009 at 5:36 pm
Some good advice there, even small savings can add up over the course of a year so don’t think that not buying the bar of chocolate everyday doesn’t make a difference.
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September 5th, 2009 at 5:57 pm
Some really in-depth and useful information here. I agree that even small savings can add up to a lot over time.
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September 8th, 2009 at 6:11 am
Worthwhile info here, thanks Jennifer. Look forward to you guest posting again.
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September 11th, 2009 at 12:08 pm
its a good advice.
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Cute Graphics Reply:
September 30th, 2009 at 10:59 pm
I couldn’t agree more. Thanks for this.
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September 17th, 2009 at 1:28 pm
Fantastic guest post…
Some really simple tips which are often overlooked but can really help you to pay off debt.
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September 21st, 2009 at 12:45 am
Your earning off of Adsense are extremely impressive, keep up the great work man.
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Cute Graphics Reply:
September 21st, 2009 at 12:49 am
I clicked the wrong post to comment on, I apologize.
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The Almost Millionaire Reply:
September 22nd, 2009 at 10:30 pm
Doing the best I can! Wish it was more, but it is consistant! Thanks for stopping by!
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October 2nd, 2009 at 11:14 am
Consistantcy is good though… and i am sure that it will begin to creep up before you know it.
Looking forward to reading some more posts from you.
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October 5th, 2009 at 6:13 am
The best thing would be to not get into debt in the first place, unless it’s a business or home loan or something. I’ve always been of the opinion if you, except for the above two reasons,can’t afford to pay cash for something it’s best not to buy it.
This is why so many people fall into credit card debt. They treat it as cash, as if they don’t have to pay it back and then wonder where it all went wrong.
Some great tips on how to get out of it.
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October 9th, 2009 at 12:30 am
Paying off your debts bit by bit is the only way to go. It does take patience, sacrifice and discipline though.
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October 21st, 2009 at 1:12 pm
I hate to be the dark stormy cloud that rains on parades but I have to through my 2 cents in. I’ll start of by saying that this is undoubtedly good advice…for the right type of person. However, I think you’re preaching to the choir on this one. My guess is that anyone who reads your blog is money-conscious already and either has little/no debt or has a plan to become debt-free. From what I’ve found, money has a multiplier effect. Those that have respect for it and save tend to end up just fine while those who don’t, end up spiraling downward. And as someone above mentioned, credit cards have extremely delayed consequences and by that point it’s hard to have any behavior conditioning.
I know that some people one day wake up and want to become debt free. I personally think that your advice won’t work for the majority of these people (I’m sure there are exceptions). I think that they need a different approach that’s less painful than scaling back expenses (let’s face it; it sucks giving up things). I like switching to an all-cash economy due to the psychology of parting with something (and the immediate feedback). Another approach I would suggest would be the “pay yourself first” method where you set aside money right off the top. That way your budget is restricted by design and the money put away can be used to save for retirement, make large down payment on debt or other necessary items (car or house; NOT boat or jet-ski).
Different approaches will work for different people. Hopefully another point of view helps.
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The Almost Millionaire Reply:
October 22nd, 2009 at 10:32 pm
@Reed,
Great insight and perspective! Thanks for sharing and for taking the time to interact.
Best,
TAM
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November 1st, 2009 at 11:05 pm
Credit card debt is killing millions of people in this country. You need to be very careful with those pieces of plastic.
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November 10th, 2009 at 1:23 am
great idea. for me personally, that also means cutting shopping costs and dining out. Instead, I stay in every other weekend and that saves me a lot.
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November 20th, 2009 at 5:37 pm
Debt really sucks and you have to have a plan and live frugally for a while to get out of it. It is worth it though as when you are in debt it is very stressful.
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December 18th, 2009 at 3:15 pm
Such a usefule blog subscribe now thanks.
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December 22nd, 2009 at 11:08 am
great idea.
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February 11th, 2010 at 1:01 pm
Having a credit cards is really helpful if the time come you don’t have a cash in your pocket. but if you don’t manage it well, it will turn you to a disaster. Doing a simple way of managing your credit cards like having a list in every purchase so that you can trace every expenses you have, i think you can handle it well when the debt came.
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July 6th, 2010 at 3:06 am
You are so right, credit card debt is terrible and that is the last thing anybody needs. Great tips.
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