In a perfect world we would all have enough money to buy whatever we wanted. Need a new car? Buy it! Need a new house? Buy it! Need a new computer? Buy it! Need a new refrigerator? Buy it!
If only life was that simple.
Unfortunately, sometimes credit cards make life seem that simple. But like the old commercial used to say, “you can pay me now or pay me later!” And if you’re not careful, next thing you now later comes along, and you have a pile of debt to deal with.
If that sounds like you, then it’s time to make some changes. Here is a simple 3-step debt reduction plan that anyone can follow. It may sound a little basic, but getting out of debt IS pretty basic. Not necessarily easy, but the concept is basic, if you do it correctly. So here are instructions for creating your own debt reduction plan in 3 easy steps:
1) What is your goal?
Like you would do for any worthwhile goal, if you want to get out of debt you need to make it specific. So the first thing you need to do is to grab a pen and paper, and write down your goal. State exactly what it is you want to accomplish. And also state when you want to do it. Simply saying “I want to get out of debt” is not good enough. It’s much too vague to be inspiring. Make your goal very specific, like “I want to pay off all 4 of my credit card bills and have a zero balance by January 1, 2012.” Now that’s motivating! If you take a trip you need to know the address of where you are going to get there, right? The same with your financial goals. Now that you know where you are going, you need to know where you are coming from…
2) Where are you now?
After setting your goal, you need to determine exactly where you stand right now. This is the starting point on your trip to financial success. So get a copy of your latest credit card statements, and make a list of all of your bills and how much you owe. You can even list them below your goal statement. If you haven’t done this before it can be quiet surprising. And very painful. But that’s OK. You need to be honest with yourself before you can make changes in your life. Nobody said “reaching for the sky” was easy. But it is possible once you can see the start line, and the finish line. Now it’s time to create your “road map” to reach your destination…
3) How will you reach it?
There are plenty of ways to pay off your bills. Make a list of every step you must take to make it happen. Here are some ideas: Pay an extra $20 or $50 each month. Use money from a savings account. Get a part-time job. Start a part time business. Stop eating out. Reduce your cable TV plan to “basic”. Get rid of “extras” on your cell phone bill. Cancel newspaper or magazine subscriptions (and go to the library once or twice a month). Sell stuff you don’t use any longer. Get out your checkbook or bank statements and eliminate as many expenses as you can. Cut coupons. Look for sales. Get the idea? There are lots of ways to save money, if you dig deep enough.
So, are you ready now to take charge of your finances? If so, that’s great.
Of course, this plan doesn’t work if you don’t follow it. Chances are pretty good that it took you while to get into debt, and it will take a while to get out. But if you start now, before long you’ll notice your debt will start shrinking, and your financial life will get a lot easier!
Want to learn more tips to help you get out – and stay out – of credit card debt? The author of this article, Kris Bickell, created www.debt-tips.com to help consumers like you learn how to find the right debt reduction program. Whether you’re looking for help getting out of debt, ways to save money, or help fixing your credit, you’ll find simple tips to help you solve your financial problems.