Handling Credit Card Debt

A lot of the most effective ways of dealing with a problem are common sense. But sometimes focusing on a problem and the solutions that you may already be aware of can help you move in the right direction. Here are some thoughts about credit card debt and how to reduce it.

Step 1 – STOP Spending Money

This one may sound easy, but it is by far the hardest. You have to figure out why you are spending so much money. You may be just buying things that you don’t need. You may be purchased to satisfy your wants. It is time to figure out the difference between wants and needs. Maybe you should take a hard look at your finances and realize that you need a change. Maybe you could stop eating out, cut your cable, and create detailed grocery lists. Maybe you could take your lunch to work every day as a way to eat better and save a lot of money. These are the things that you can do to stop spending money. Beyond paying your regular bills, you need to figure out where the rest of your money is going and cut off the spending. It may be harsh, but it is important.

Step 2 – Pick Your Debt Payoff Method

Once you figure out how to stop spending money, then you need to choose a debt payoff method. To be very honest, it doesn’t matter which method you choose. The only way you will get out of debt is if you choose a method. There are no winners here by choosing one over the other. If you choose something, you’re a winner! Remember that and move forward. I’ve even seen people start out with one method and switch. You can do it month by month. Just start today!

Step 3 – Stay on Target and Focused

Welcome to the next hardest step. Paying down debt is not easy and it will usually take some time. We all don’t have the luxuries to just pay off our debt in a couple of months. It will most likely take years. There are so many temptations that occur in everyday life, but you have to understand your goal.

Do you want to be buried in debt or would you rather have financial freedom? Choose financial freedom. Don’t be afraid to tell your friends or family that you can’t do something because you can’t afford it. You may not want to irritate your friends or family, but these are necessary changes. If they love and respect you, they will understand. Paying off debt is about you becoming a better person and more financially stable. You have to do whatever you can to stay on target. Make some simple changes along with harder changes to make sure you stay on your debt payment plan.

Step 4 – Make More Money

You can only save so much, so there might be many times where you just don’t make enough money to accelerate your debt repayment. There are quite a few ways to make more money besides your full-time job. You can sell things on Craigslist, sell on eBay, taking surveys (yes, this can work), start a blog. You have to think outside of the box when you are paying down debt. Think of something that you are good at and go see if you can make money from it. Don’t spend money to start a side business though. That would be unwise.

Do you want to be buried in debt or would you rather have financial freedom? Don’t be afraid to tell your friends or family that you can’t do something because you can’t afford it. You may not want to irritate your friends or family, but these are necessary changes. If they love and respect you, they will understand. Paying off debt is about you becoming a better person and more financially stable. You have to do whatever you can to stay on target.

Step 5 – Learn How to Save More Money

As you can probably imagine, people aren’t typically much of a saver when they are in credit card debt. . It hurts to realize what you did to yourself with your needless spending.

Just look at the power of compound interest. Goodness, that’s some powerful stuff. You could be leaving money off the table for yourself later down the road and for emergencies in general. We all need to try to save for retirement, do some investing, and socking away cash for emergencies.

It seems we really make saving money much harder than it needs to be. Saving money is really not that hard. We just have messed up priorities. We can’t differentiate between wants and needs and that needs to stop. Once you stop using “need” for everything, you will realize that you could do without so much more and keep more money in your pocket. Change it and your financial freedom will follow!

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida. For more information, go to our web site www.BankruptcyforTampa.com or call 727-254-1704.