Outlining The Initial Strides To Driving Down Your Debt

By Author: Nicholas Hunt
Total Articles: 434
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Debt troubles are causing untold misery for more and more of us, and personal debt levels are at their highest ever. A lot of us want to get started on repaying our debts, but the task can look too much to face. There are, nonetheless a number of good techniques you can apply to get started on the path to a debt free future,

First off, it's essential to look at your expenditure and push it down whenever you can. There's no use in aiming to reduce debt with one hand while the other is busy building up new borrowing. Resolve to stop using your credit cards except as just a payment method, always paying back what you've spent when your monthly statement comes. Also look at cutting down on on your everyday expenditure - purchasing less expensive brands, forgoing the occasional treat or night out, it all helps.

But just this will not do a great deal to clear your debt - you need a program to pay it down as soon as you can, and this is where the concept of 'debt snowballing' applies. Basically, you focus your attention on paying off one debt as fast as possible, putting all your spare cash into this ...
... effort while keeping up your other debts at their nominal repayment amounts. Once this first debt has been fully repaid, add the monthly repayments you'd been making on it to the payments on the next debt on the list. This way, the potency of your money gets greater and greater as it transfers from one debt to the next.

If you're having real difficulty making your repayments, though, the last two methods aren't going to fend off financial disaster. It's now that consolidation might be a utilizable option. The essential idea is to take out a new line of credit, and use it to clear all your present debts. The idea is that paying back your new single loan will be less expensive than the combined fees, interest and charges of your previous debts, and so more of your money will go towards reducing the amount you owe rather than just pouring money down the drain paying the interest.

You really need to tread cautiously with this last choice though, as you're maybe increasing your debt problems rather than alleviating them. Be sure you have the self-discipline to clear your old debts and not run them up again before going down this route.

None of these alternatives are easy, and none are without their downsides. However, most of us accept now that our debts are too high and we need to start doing something to bring them down, whatever the immediate pain that might be involved. By taking these suggestions and making use of them, you can make that initial stride towards becoming debt free.

About the author: Nicholas writes for http://www.debtnation.co.uk/ where you can read more about handling debts at http://www.debtnation.co.uk/credit-card-arrears.html