1. 4 Steps to Consumer Debt Reduction
By http://www.LendingAndCredit.net
Figure 1: Reduce Your Debts to Save More
Let's face it, the economy is not as strong as it could be, and while it's struggling
along, more and more people are finding themselves getting deeper and deeper
into debt. The sad thing is that, most likely, none of this debt is your fault. After
all, you need a place to live and food to eat, but circumstances beyond your
control have now left you owing more money than you can pay back. However,
consumer debt reduction may just be the silver lining you've been looking for.
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2. Of course, there is more than one way to reduce your debt. Which one you
choose will depend on your personality, as well as your current situation. That
being said, here are some things you can do--whichever method you decide to
use--to get yourself off to a strong start.
1. Know exactly where you are.
It's time for a gut check. You need to write down all of your debts, interest rates,
household expenses, and any other money that is being spent. Be specific, and
account for every single cent. Be sure to write down all of your income, and
remember to list any liquid assets you may have that you can apply toward
lowering your debt.
2. Set your priorities.
You need a roof over your head, water, and food to eat, so those things should be
your highest priority. Utilities and medication will also be near the top of the list
for a lot of people. Next is a vehicle, especially if you live in the country, or have
no other way of getting to work.
Does this mean you should give up all of the little "treats" in your life? Not
necessarily, but you need to make sure the necessities are taken care of first.
After that, you can start deciding which things are more important. Because we
are talking about consumer debt reduction, it makes sense that the less necessary
items should be the first to go. For example, do you really need the full satellite
television package, or could you live with basic TV for a few months if it meant
you could get out of debt?
3. Reduce the amount you owe.
Yes, you will be chipping away at your debt with each payment you make, but
we're talking about reducing it all at once. The way you do that is by talking to
each of your creditors. They may be able to forgive late fees, lower interest rates,
or remove other arbitrary penalties. If they won't do any of that, then you can
always consider getting a debt consolidation loan which will have the same effect.
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3. 4. Increase how much you pay.
The more you can pay toward your debt, the quicker it will be paid off. Now that
may sound obvious, but the reason this is so important is that it negates the
effect of compound interest. Depending on how much you owe, and the current
interest rate, paying double the minimum payment could allow you to pay off
your debt eight times faster! How's that for consumer debt reduction in action?
Do you want even more action-oriented tips? The visit our website today, right
now at:
http://www.LendingAndCredit.net
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