Balance Your Budget: Why You Need a Debt Reduction Plan

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Balance Your Budget: Opt For This Debt Reduction Planner

By Jan Ashby

If you find yourself under a mountain of debt, you may be one of the millions of people in the U.S. who needs to “bite the bullet” and

balance your budget

Do you find yourself in a BLACK hole due to excessive credit card spending? You may feel you’ve let yourself down, and are looking for a way out.  Well, guess what – a good debt reduction planner will do the trick. While it isn’t a quick fix, and will take determination, it will work out for you in the LONG run.

Work the Plan, and the plan will work for you <<   😛

Balance Your Budget: Set Realistic Goals, and Take Control of Your Finances

This method of reducing your debt consists of focusing in on the problem, listing out all the unnecessary expenditures, and taking control of yourself and your finances.  You’ll have to be prepared to STICK  with it – and not get lured in by the latest sale.  It is probably best if you hide some of your credit cards; you may want to pare down to just 1 or 2 credit cards.

There will be no more “getting carried away” with purchases at Christmas time or birthdays. You need to be realistic about what it IS you REALLY need.

You need to have an iron fist with yourself   

These days, many people get tempted to buy something on a whim, for themselves or their kids.  You have to find a way to RESIST this, if this debt reduction plan is going to work for you.  Then in the future, the Credit Card will be used ONLY for true emergencies  (medical, a death in the family etc.).

You may have to pare down on things like eating out, and learn how to prepare meals more economically.

Now here’s a list of steps for you to follow in order to balance your budget

This will HELP you become completely debt free. Just think –  you don’t have to stop there!  You could continue on, and use this method to get your mortgage paid off, and also  your car loan(s). Wouldn’t that feel wonderful?

Just follow these steps:

1) Before you can begin your plan to be debt free, you need a complete picture of your current finances.  You have to be able to examine, and analyze, your situation.  No matter how overwhelming, YOU must list down each and every debt – no matter what.  Include interest rates, balances, even loans from your brother, etc.  And be sure to add any household expenses like utilities, grocery bill, cell phone, landline etc.  Also:  hairdresser, personal trainer etc.

This way, you will get a good picture of the monthy expenditures you have.  Okay, now after you’ve listed ALL of the expenses, you move on to Step 2 – this will be to create a more detailed outline of your monthly expenditures – no, you can’t leave anything out – BE SURE to list down at least the monthly minimum payment to credit cards, along with the usual monthly bills.   😐

I repeat, be sure to put down minimum payments to all of your MONTHLY bills, and any household bills.

2) Select a debt, generally the smallest one.  Okay, instead of only paying the minimum amount, you now pay EXTRA each month. How much extra?  As much as you are able. You already have established a complete budget for yourself, where you’re making payments to every debt you have – now you take any money you have left over, and apply it to this one debt.   😆

Reason:  Doing only monthly minimum payments to credit cards (or “revolving debt”) will NOT get you out of the mess you are in – you need to arrange to pay more than just the monthly minimum!  (these are only interest payments and you’re not touching the principal – so if you can pay even a small amount to the principal each month, you can dramatically decrease your debt).

3) Once you have accomplished paying the first debt, take the extra money you were paying on this debt – and pay down the next smallest debt you have.  Bear in mind that you will still be making a minimum payment on each remaining bill you have.

Ultimately, you’ll find yourself debt free.  Of course, it won’t happen “overnight” –  as to how long it will take – well, this will depend on how much of the principal you pay down each month, what your total debt is, and how disciplined you are.  Just be POSITIVE 😉  because this can work for you !

Overall, this is a great way to reduce your debt, as you aren’t ‘rearranging’ your debt – as you would be with a debt consolidation loan or a “bridge” loan; you are truly paying it off completely.

To Your Success,

Jan Ashby WordPress for Beginners Instructor   Jan Ashby


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