Being out of control financially can put a serious burden on your entire life. Not having the money to pay your debts is stressful, puts you on edge, causes strain in marital relationships, and the effects just trickle on down.
So where do you start? How do you stop this financial madness? It’s difficult to gain control when it seems that every credit card in the nation is sending you tempting offers of buy now, pay later. The sad part is, most Americans choose to do so and they suffer for it miserably.
Case and point: You get a credit card offer with a low interest rate, say 5 percent. You buy a nice new $500 flat screen television and you’re loving it. A month later, your low interest “trial period” (Did you check the fine print?) expires and your interest has skyrocketed, yet all you can afford is the minimum payment. When it’s all said and done, due to the power of compound interest, you end up paying $1500 for something worth $500. We don’t take the time to do the math, but that is absolute madness. So let’s be the ones in control, and no longer the victim. Here’s how you can do it in four easy steps:
1st Step- Know what your credit looks like. Go to www.annualcreditreport.com to request your credit report for free. You will be asked security questions to verify your identity, and then you can view your credit information. If any information on your credit report is not accurate, you can challenge it right on the website and it will be reviewed. As for accurate debt, print out your report or write it all past due accounts and the amount owed on each account down,
2nd Step-Cut up your credit cards and attack! This may seem a little extreme. But there is way too much temptation in those pieces of plastic that allow you to spend money you don’t have and then tax you like crazy later. Cut them up, throw them away, and forget about them. Now attack your debt. Most people recommend paying of your most expensive debt or your highest interest rate debt first. Logically, it makes sense, emotionally, it does not. I suggest you pay off your least expensive debt 1st. Why? If you attack your highest debt first, it will seem like you’ve been paying and paying with very little progress. This could seriously discourage you and make you give up on aggressive debt attack all together. When you pay off your lowest debt, it’s done faster and you get the emotional high of checking a debt off your list. Heck, this might even inspire you to increase your amount of payment on your other debts due to the progress your making. Make your list of debts from lowest to highest. Work your way up to the giant debt, then, knock him out like David did Goliath!
3rd Step- Reanalyze your credit report. Once you have managed to pay off a significant amount of debt, Take another look at your credit report. Make an attempt to remove items that are paid off rather then watch them sit on your credit report for 7 years. Example: I owed the library and didn’t even realized it because I had a boyfriend of mine return books for me. I found out he never did when I checked out my report because the debt of 100 bucks was on my report. I quickly paid the debt off and then challenged it on my report saying that I was ignorant of the debt, and had I known I would have paid it off. It was removed from my report a few weeks later. I used this same concept to have 2 other debts removed off my record. My request was rejected twice on my other requests, but I kept re-challenging the debt and it was finally removed. I guess consistency was the key, give it a try!
4th Step- Stay away from all future credit card debt. Supposedly having a lot of credit cards that you’re current with is good for your credit. But is it good for you? Think about what you went through. The stress and strain of being in big debt or any debt for that matter is devastating. The only debt you should have is your house and your car. I shut down my credit card accounts and my car payment alone brought my credit from the 500s to high 700s. Credit cards are simply not worth it. It’s a trap I suggest you steer clear of.
Bottom line: There is no magic button to get rid of debt. If you’re truly ready to get your life on track, you will. Seek the way and it will be there. But please, don’t make excuses for the situation you’re in. If you’re ready to kill your debt you have to take serious action to get it done. Don’t sit and stare at your bills and cry. That’s ridiculous. Starts somewhere, pay where you can, and you’ll see soon enough that your efforts are working. There’s nothing more satisfying than that. Being free of debt is truly being free. The bible says the borrower is slave to the lender. This is so true, so let’s be slaves no more.