The best advice that the elimination of debt a person can get is to avoid debt in the first place. Therefore, a person who seeks to eliminate their debts should always try to avoid increasing their debt. Here's Some Helpful Advice For Debt Elimination
Maintain a cash reserve or savings
A good way to do this is to always keep a few hundred dollars that you can use in an emergency available in an emergency checking account. This can help you decrease your level of debt and is an alternative to using credit cards that you might have available.
Another good tip is to try to bring some money with you and leave the extra money that you really shouldn’t use, at home. Maintaining a cash reserve is essential to eliminating debt.
Something to be avoided is to use all of your money to pay off your debt. Always try to save at least 10% of your money. Stowed it away, in the event of emergency, you will have access if you need it quickly.
Another good tip is to keep saving, even when you eliminate debt.
Do not pay your debts until you put money into your savings account. This way, you will create additional funds, while still paying off debts. Always put at least 10% of your income into your savings each month.
Pay higher interest debts first
Go through your debts and find the ones that are the most expensive to pay and try to eliminate them first. Try to pay the higher interest debts such as credit cards, prior debts such as mortgages.
Another good idea is to see if you can transfer the higher interest debts to lower interest debts. It is possible to transfer credit card balances to cards with lower interest.
It might also be a good idea to use a mortgage or a home equity line of credit to pay off credit card debt and high interest rates. Mortgage interest is lower and usually comes from better payment terms.
Avoid additional debt
The best method of debt elimination is not to get debt in the first place. It happens! Easy to say, right? We all like to have nice things, but what this means is, that you should learn how to have no debt. Then getting the nice things CAN happen.
Start examining your spending habits and day-to-day routine and identify ways that you are creating debt by spending. Then try to eliminate the unnecessary spending, day to day.
Another way, would be to try to make purchases with cash or debit cards instead of credit cards. This may end the impulse shopping and put a dent in future debt burdens.
Learn how to set yourself up for shopping for the items you need instead of what your want.
Don’t overlook buying store brand items, it can save you money. Instead of buying name brand items with high prices, buy the store brand, read the labels, most of them are exactly the same as the store brand.
Take the money you saved and put it in your savings account instead. It may not seem like much at the time, but it sure adds up.
Debt elimination is possible and quite easy as long as you exercise discipline and common sense.