Financial Power

The Only Way to Get Out of Debt:

The answer is not the interest rate BUT changing your habits. You need to commit to getting on a written game plan and sticking to it. Get an extra job and start paying off the debt. Live on less than you make. It is not rocket science, but it is emotional, which is why most people need help getting through it. If you are unable to manage your financial situation by yourself ask for professional help!! You are not the only one who made mistakes, and you can turn things around.

Debt Elimination

Debt Elimination will become a primary goal only when you understand the true cost of debt. Until you know the total cost of your debt and how long it will take to pay it off… you will not make good choices when it comes to debt.

Consider this example…

You have a credit card balance of $20,000. The interest rate is 18%. You make the minimum required monthly payment (2% of balance for this example … some card companies may require a larger minimum payment 4% for example). A larger minimum payment will pay the balance off faster and reduce the amount of total interest to be paid.

Getting back to our example… This payment method will require well over 30 years to get rid of this debt. And you will pay $50,225 in interest alone.

So the total cost to you under this sort of payment plan is… $20,000 balance plus $50,225 interest for a total of $70,225. So really… how much debt do you have? $20,000 or $70,225? Were your purchases worth $70,225 to you?

>Are you OK with paying $70,225 for $20,000 worth of products or services?

Would you now make different choices if you could do it over again? I hope so!

Spend your hard earned money wisely. Calculate the total cost of all of your debt based on your current payment approach. Never make new debt without first knowing how much it will ultimately cost.

Create a debt strategy now so you can have the life you deserve. Make debt elimination your top priority.

It’s really possible to turn any financial situation around!!! You have to have a plan and you have to stick to it, and start making steps even if they are small baby steps, if you start making steps forwards your dreams, you will get there one step at the time.

Related posts:

1. Debt Consolidation vs. Debt Elimination
2. How To Get Out of Debt?
3. What is Debt Consolidation?
4. Holiday Spending – without Holiday Debt.
5. Pay Your Credit Card Balance in Full
6. Manage Debt Before It Manages You!
7. Getting Your Finances in Order Before the Holidays

Tags: Debt, Debt Elimination, Financial Plan, Steps to financial independence

This entry was posted by FP on Sunday, March 15th, 2009 at 1:04 PM and is filed under Debt Elimination, Financial Plan, How to get out of debt. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.