Credit card debt is one of the major reasons why there are over a million bankruptcies every year. Many people get credit cards without researching and reading the small print information. The result is annual fees are tacked on, along with overspending, missed payments, this causes your balance to get out of control.

You may try to shift the blame on the credit card and the companies who send us the cards, but you need to realize that the real person to blame for this mess is you.

One over indulgent shopping spree does not usually result in maxing out your plastic. It consists of a pattern of behavior that makes you spend more and more, adding up to increasing debt. The good thing is though, that it can be somewhat easy to get out of debt. The key is to spend less than what you earn, this is a long term solution that will let you slowly get out of debt.

It may sound simple, but it can actually be very hard if you have a problem with resisting temptation. It is very important you stick with a budget and decrease your spending or you will find yourself stuck in a vicious cycle. Getting out of debt takes dedication, patience and a good deal of time.

It can be hard to stick with your payment plan, but keeping yourself strong and focused is the key to help get you out of debt quickly.

It is also important for you to learn how to get and stay out of debt. If you can resist the temptation to spend with the tempting words zero interest and exert willpower when it comes to your finances, then you will find yourself ahead in the game of debt. It might be easy to get yourself into debt with those balance transfer option, but getting out can be way more difficult, but a worthy endeavor.

Keep one simple thing in mind to sum up the solution to your financial conundrum; If you cannot afford it, then do not buy it!

Technorati Tags: Balance Transfer, Credit, Debt

Elimination of your debt requires three simple steps:

1. Stop acquiring new debt.

2. Establish an emergency fund.

3. Implement a debt snowball.

Here’s how to approach each step.

Stop acquiring new debt (This step can be accomplished in an afternoon.)

This may seem self-evident, but the reason your debt is out of control is that you keep adding to it. Stop using credit. Don’t finance anything. Cut up your credit cards.

That last part may be tough. Don’t make excuses. I don’t care that some personal finance sites say that you shouldn’t cut them up. Destroy them. Stop rationalizing that you need credit cards.

* You don’t need credit cards for a safety net. * You don’t need credit cards for convenience. * You don’t need credit cards for sky miles.

You don’t need credit cards at all. If you’re in debt, credit cards are a trap. They only put you deeper in debt. Later, when your debts are gone and your finances are under control, maybe then you can get a credit card. (I don’t carry a personal credit card. I don’t miss having one.)

After you destroy your cards, halt any recurring payments. If you have a gym membership, cancel it. If you automatically renew your World of Warcraft account, cancel it. Cancel anything that automatically charges your credit card. Stop using credit.

Once you’ve destroyed the cards, call the credit card companies that you just killed. Do not cancel your credit cards (except for those with a zero balance). Instead, ask for a better deal. Find an offer online and use it as a bargaining wedge. Your bank may not agree to match competing offers, but it probably will. It never hurts to ask.

Establish an emergency fund (This step will probably take several months.)

For many, this is counter-intuitive. Why save before paying off debt? Because if you don’t save first, you’re not going to be able to cope with unexpected expenses. Do not tell yourself that you can keep a credit card for emergencies. Destroy your credit cards; save cash for emergencies.

How much should you save? Ideally, you’d save $1,000 to start. (College students may be able to get by with $500.) This money is for emergencies only. It is not for beer. It is not for shoes. It is not for a Xbox 360. It is to be used when your car dies, or when you break your arm using RIPSTICK.

Keep this money liquid, but not immediately accessible. Don’t tie your emergency fund to a debit card. Don’t sabotage your efforts by making it easy to spend the money on crap. Consider opening a savings account at an online bank like ING or e-trade. When an emergency arises, you can easily transfer the money to your regular checking account. It’ll be there when you need it, but you won’t be able to spend it spontaneously.

Implement a debt snowball (This step may require several years.)

After you’ve finally stopped using credit, and after you’ve saved an emergency fund, then attack your existing debt. Attack it hard. Throw everything you can at it.

Some experts say to pay your highest interest debts first. There’s no question that this makes the most sense mathematically. But if money were all about math, you wouldn’t have debt in the first place. Money is as much about emotion and psychology as it is about math.

There are at least two approaches to debt elimination. Psychologically, using a debt snowball offers big payoffs, payoffs that can spur you to further debt reduction. Here’s the short version:

1. Order your debts from lowest balance to highest balance. 2. Designate a certain amount of money to pay toward debts each month. 3. Pay the minimum payment on all debts except for the one with the lowest balance. 4. Throw every other dime at the debt with the lowest balance. 5. When that debt is gone, do not alter the monthly amount used to pay debts, but throw all you can at the debt with the next-lowest balance.

I’m a huge fan of the debt snowball. It still takes time to pay off your debts, but you can see results almost immediately.

Supplementary solutions

You can do other things to improve your money situation while you’re working on these three steps.

First, focus on the fundamental personal finance equation: to pay off debt, or to save money, or to accumulate wealth, you must spend less than you earn.

Curb your spending. Re-learn frugal habits. (Frugality is something with which most college students are all too familiar.) You can find some great ideas on the internet. Also check Frugal for Life.

While you work on spending less, do what you can to increase your income. If possible, sell some of the crap you bought when you got into debt. Get an extra job. (But don’t neglect your studies for the sake of earning more. Your studies are most important.)

Finally, go to your local public library and borrow Dave Ramsey’s The Total Money Makeover. Don’t be put off by the title – this is a fantastic guide to getting out of debt and developing good money habits. I rave about it often, but that’s because it has done so much to help my own personal finances. After you’ve finished, return it and borrow another book about money.

The most important thing is to start now. Don’t start tomorrow. Don’t start next week. Start tackling your debt now. Your older self will thank you.

Technorati Tags: Credit, Credt, Debt, Finance

As the economy spirals out of control it is effecting many households. Individuals are snapping under the stress and blame bad financial choices on the government. Some are committing suicide or killing their own family members. If you think this is just crazy talk or some made up news story, it is true. Seems some people just can’t cope with financial disaster, especially if they have never been broke before.

Financial stresses in this country are affecting more than the wallet. If you are feeling the strain, make it a priority to get back on track. Your stresses of trying to keep all the balls up in the air will only compound and get bigger without some action. My perosonal opinion is, if you are not good for yourself you can’t be good for your family. Getting better for yourself means finding the discipline within yourself to bring your finances under control.

In my opinion, saving is the simplest 1st step to getting out of debt. You say, wait a minute, I can’t even pay my bills, how am I going to save. Well, think about this. Every time you shop, find the best deal you can get. The important part here is that isn’t how much money you are making every month. What matters is how much of it you can hold on to to use to pay down your debt.

Here is a simple concept to think about. If you bring home $9000.00 this week and spend $9001.00 you are overspent a dollar. If your neighbor brings home $100.00 but is able to save $50.00, who is better off debt wise? He may wear flip flops to work but at the end of the day who has less stress thinking about next weeks bills. It is all relative, but you get the idea.

Creating a budget is very easy after you get started and stick to it for a month or so. Then, it becomes the norm. Eventually, as you start to see your savings grow you will do more to increase the amount saved. Begin your budget by listing all of your bills on the dates they are due. When you go to the bank on payday deposit the required amount to cover those bills into checking. Have the cashier give you enough spending money to get you through the week for gas, groceries, movies etc. Lastly deposit any remaining money in your savings account. If you don’t think you can save any, cut back on the spending money and try to save at least 10% of that amount.

Once upon a time, I learned an exercise acronym called F.I.T.T. It stands for Frequency, Intensity, Time and Type. The F.I.T.T. factors are supposed to be followed in order to increase you physical stamina. The most important and heavily weighted of these factors is frequency or the number of times you actually exercise. The same holds true with saving. Do it every week, no matter how little the amount. You may say, well saving $10.00 just isn’t worth saving so I am going to spend it. I say deposit that $10.00. You are doing more than just depositing $10.00, you are training yourself to be a saver which will eventually get you out of debt. Every week attempt to find ways to save more.

But before I do, lets talk about credit cards. Bottom line, if you don’t have the will to stop using your cards you might want to cut them up. That goes for debit cards as well. If you don’t cut them up, put the cards in a home safe or safety deposit box. That way, if you have an emergency you will have access to your credit. Work hard to spend your spending money and that’s it. When your allocated spending money is spent, consider finding a free activity or waiting until you get paid again to make a purchase. Credit card interest racks up faster than many people realize. Your savings will be greatly reduced by paying high credit card fees. This is one of those things that happens over time like a frog in a pot of boiling water.

Now that we have the credit cards under control, let get back to your savings plan. Remember, it isn’t what you make that is important, it is what you save. If you really want to increase your savings ability, take advantage of every discount, coupon and promotion available. Half off or buy one get one free deals are the best if you have to buy two anyway. Lets say you have to buy both kids a pair of shoes and separately it will cost $20.00 each for a total of $40.00. Buy one, get one free puts $20.00 in your savings account. There are hundreds of coupons and discounts available at MyWorldPlus.

Technorati Tags: business, earn money, finances, home business opportunity, make money, Money, money making, personal finace, saving money, work from home

Finding your way out of debt can be difficult. However, if you find yourself in this position, there are some steps you can take. These options include credit card counseling and debt consolidation.

If you have many credit cards and are just falling deeper in debt, credit card counseling can help you. In this program, a counselor will help you to learn how to manage your debt. They will help educate you about credit card debt and give you the skills to find your way out of debt. This counseling will help you avoid the destructive spending habits you have acquired, and be more diligent about paying down the balance, two main issues which draw people into debt in the first place. They will teach you to be responsible with how you use the card, to avoid racking up even more debt.

When you begin the program, your final goal will be to be debt free. In order to pay off all of your debts, you must do whatever it takes. This means asking lots of questions when you meet with your counselor. If you don’t understand the explanation, it is okay to ask again. You can also do research yourself. The point is that educating yourself about your debts can help you get out of them.

When you enter a credit card counseling program, one of the things they can help you with is debt consolidation. However, you’ll want to do your own research to be sure that this is right for you, and understand the side effects of consolidating your debt.

For example, be sure to ask about whether you’ll be able to use any of your credit cards during the debt consolidation process or for future balance transfer options. Because this is reserved for people with a lot of debt, most programs require that you give up the use of all of your cards just to obtain a good credit rating. This, of course, is the surest way to avoid adding to the balance while you’re trying to pay it down. If you seriously want to get out of debt, you should stop using your cards. After all, overusing the cards and racking up a balance that you cannot pay off are what got you into debt in the first place.

When you decide on credit card counseling, make it your top priority to get rid of all of you debts. Carefully research the debt management company you choose, to make sure that they will be able to help you out of your specific situation. Stick with it, and you will be able to get out of debt and stay debt-free.

Technorati Tags: Credit, Credit Card, Debt, debt consolidation

Finding your way out of debt can be difficult. However, if you find yourself in this position, there are some steps you can take. These options include credit card counseling and debt consolidation.

If you have many credit cards and are just falling deeper in debt, credit card counseling can help you. In this program, a counselor will help you to learn how to manage your debt. They will help educate you about credit card debt and give you the skills to find your way out of debt. This counseling will help you avoid the destructive spending habits you have acquired, and be more diligent about paying down the balance, two main issues which draw people into debt in the first place. They will teach you to be responsible with how you use the card, to avoid racking up even more debt.

When you begin the program, your final goal will be to be debt free. In order to pay off all of your debts, you must do whatever it takes. This means asking lots of questions when you meet with your counselor. If you don’t understand the explanation, it is okay to ask again. You can also do research yourself. The point is that educating yourself about your debts can help you get out of them.

When you enter a credit card counseling program, one of the things they can help you with is debt consolidation. However, you’ll want to do your own research to be sure that this is right for you, and understand the side effects of consolidating your debt.

For example, be sure to ask about whether you’ll be able to use any of your credit cards during the debt consolidation process or for future balance transfer options. Because this is reserved for people with a lot of debt, most programs require that you give up the use of all of your cards just to obtain a good credit rating. This, of course, is the surest way to avoid adding to the balance while you’re trying to pay it down. If you seriously want to get out of debt, you should stop using your cards. After all, overusing the cards and racking up a balance that you cannot pay off are what got you into debt in the first place.

When you decide on credit card counseling, make it your top priority to get rid of all of you debts. Carefully research the debt management company you choose, to make sure that they will be able to help you out of your specific situation. Stick with it, and you will be able to get out of debt and stay debt-free.

Technorati Tags: Credit, Credit Card, Debt, debt consolidation