Non Profit Debt Reduction

Everyone is trying to get out of debt these days. Now the key to getting rid of debt is first of all to stop making new debt. If you find that you have an addiction to plastic, then get a debit card. If you are continually adding more debt there is no way of becoming debt free. If you are going to have some form of debt, then make it a mortgage. At least that way your will have something worth what you paid.

The first thing you need to do is cut up all credit cards. Credit cards only cause more debt. If you stop using them, then you’re not accumulating more debt. If you have some cards with a lower interest rate than others see about transferring a debt from a higher interest card. If this is not possible, call the credit card companies and request a lower rate. Normally this can be done every six months as long as you are making your payments on time. Since you will be paying off your credit cards (and hopefully at a lower rate) you will be able to see your debt going down.

Next you are going to need to list all of your debts. If you have a small debt, allocate the funds to pay off that debt first. This does not mean to not make a payment on another account. Use money that you would normally have spent eating out or just used to buy something you were not going to use anyhow. Once this debt is paid off do the same thing to pay off your next smallest debt. As you pay off your credit cards you will have the amounts you once used for those payments to add to paying off your debts. Credit cards are not the only debts that should be listed here. you should list all loans here as well. If you are paying on furniture, or electronics list them here as well.

The point of getting out of debt is to pay off all debt without accruing more. Do not trade in something that is almost paid off to start paying on something else. If you car is paid for and in good condition, keep your car and use what would have been your car payment to either pay off other debt or put it in a savings account specifically for your next car. You would be surprised just how quickly that money will add up and how soon you will be able to purchase (with cash) another car. Getting out of debt does mean sacrificing a little but the more you sacrifice up front the sooner you will have the money to purchase free and clear what you other wise would have bought with credit. You will not only feel better to be out of debt but how good does it feel to be able to pull out cash and pay for it on the spot?