So You Want to be Debt Free

Getting out of debt is a life changing decision. You will find you have so much more freedom in the long run. One of the first things to do in order to get out of debt is to set up a personal budget. This can be kind of frightening at first but it is the key to your financial freedom. In order to do this you will need a few things. A copy of all the bills for at least 2 months, Pen and paper and perhaps a calculator. Now, in one column jot down each and every bill. From your rent all the way down to your mad money that you spend on that soda you ran out for on break. Include each and every credit card in this column, even if you don't owe a dime on it! EVERY CENT needs to be accounted for so jot them all down. Total this at the bottom of the page.Set that aside. Now jot down all of your income, whether it be your job, interest paid to you on stocks, child support, alimony payments, anything that you receive on a regular basis goes here. Not total that at the bottom of the page. Now compare the two columns. Is one bigger than the other? Which one? Oh dear, the expenses are larger than your income? This is scary indeed. Where can you cut back? Can you eat out less, can you cut back on those soda's at break? Keep trimming, Are you paying late fees on those credit cards? Lets get rid of those and pay on time. Is your payment too high? Call the company right away before it gets any more out of hand and talk to them. See if you can negotiate it down to a lower price for a few months until you get caught up. Most credit card companies are very willing to work with you on reducing your payments for a short time. Agree to what you can afford only. Don't let them bully you into what you cannot afford. Keep it realistic. Offer to send them in a copy of your budget. Explain in writing that you owe "X" amount to various companies and show them what you are paying each company and let them see that they too are having reduced payments. Negotiate negotiate negotiate. Now take a short break. Breathe....doesn't that feel a little better? Continue re evaluating this ever few months. Slowly you will see your debt going down. Make a chart and write down each payment. Cross it off once you are out of the red so you can see that you have met your goal of reducing payments and getting out of debt. Seeing is believing. So you really want that latte. Allow yourself a little indulgence once per month. You choose the day. Maybe one day you just really need that pick me up. Don't deprive yourself but be realistic. Can you manage with creamer and the office coffee pot most of the time? Then do it. Commit yourself to these little goals and watch your money increase and watch your debt decrease. Now don't you look smart!