Once you have stopped spending...

If you have really made a firm commitment to stop adding to your debt, first take a deep sigh of relief, then pat yourself on the back for a job well done - you are one of the lucky few that has chosen to break the cycle of debt and start moving towards financial solvency and eventually, prosperity.

Next, you are ready to move on to choosing a the right strategy for you to get out of debt. What strategy you should choose depends on the details of your financial situation. Our first strategy is for those who are still current on their credit card payments, even if they are only making minimum payments.

If you are not current on your credit card payments - if you are receiving collections letters or your account has been sent to a collection agency or law firm, then you might be best served by skipping ahead to the next section by CLICKING HERE. For the rest, continue on reading.

A simple strategy

This strategy is for those of you who are still current on your payments. It is a rather simple strategy - it involves paying down your debts until you are debt free. This requires discipline and planning. Let's divide this strategy into two parts:

• attempt to lower your interest rates
• develop a comprehensive schedule to pay off your debt

Lowering your interest rates

There are two simple ways to attempt to lower your interest rates. This first involves calling your credit card companies and asking them to give you a lower rate. Believe it or not, it sometimes works.

This method is generally more effective if you have been with the credit card company for at least a couple years and have kept up with your payments.

When speaking with the credit card company,emphasize the fact that you have been a loyal customer and that you have made your payments on time. You might also mention that you have received offers of lower rates from other companies, but that you would prefer to stay with your current company.

The second method of obtaining lower rates is simply to find a company that offers lower rates and transfer your balance over to that company.

Develop a payment schedule

The second part of this simple debt relief plan is to develop a comprehensive schedule of payments which will allow you to pay off your debt altogether. The following is a list of steps involved in this part of the plan:

• Make a list of all your creditors - that is, all the companies that you owe money to. Include all your credit cards, department store cards, gas cards, and any other revolving lines of credit.
• Next, write down each of your current minimum payments for each of these creditors.
• Now add up all these minimum payments. This is your baseline payment.
• Then, list each of your creditors by the amount of interest they charge, from highest to lowest.
• Next, consider how much more you can reasonably afford to pay each month. The higher the amount, the faster you will be debt free.
• Finally, apply this additional amount to the card with the highest interest rate. Once you have paid of that account move to the next card on the list, and so on.

This simple method works for some people, but it takes dedication and discipline. For everyone else, fortunately, there are some great new low-cost tools at your disposal that help you both create a payment plan and execute that plan.

Often, if you make a small financial commitment to tools like these, you will find you are more likely to follow through with your plans than if you go it alone. In addition, these tools do all the hard work for you, leaving you no excuse not to free yourself from your debt and start living a more prosperous life.

New tools you can use

The first of these tool sets is offered by a company called Invest in Your Debt. This company offers a great, inexpensive electronic textbook which helps you plan your debt exit strategy. Among the book's highlights are information on how to:

• Eliminate Credit Card Debt, Car Loans, Home Equity Loans and Even Student Loans - in Just 1-4 Years!
• Then Pay Off Your 30-year mortgage in another 3-5 Years!!
• Live 100% on a Cash Basis, even when financial surprises occur, and Never Need credit again.
• Turn Every $1 of debt into $10.59 of Future Wealth.

This company also offers some fine and inexpensive net seminars starting at just $17.

A second set of tools is offered by a company called Mvelopes. They offer an excellent software-based Personal Budget Planning System, and their product description is as follows:

"Mvelopes Personal is an online home budgeting system that helps you look to the future and plan your spending accordingly. With Mvelopes you can easily create a household budget, track all your spending, and always know exactly how much you have left to spend in every category. Mvelopes gives you access to all your financial information anytime, anywhere."

 

 

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