11 Steps to Becoming Debt Free

It takes courage, time, and persistence to become debt free… and it is possible.  These eleven steps will put you on the right track.

Face the situation.
Stacks of papers and unopened bills will not improve the situation.  You are not the only person who has gotten in over their heads.  You cannot improve circumstances you are trying to avoid.

If credit cards are your problem, quit using them.
Cut them up if necessary.  Keep one card for emergency purposes.  Do not charge anything that you cannot pay cash for.

Become an expert on where you are.
Set up a worksheet with the following headings.  Complete the list then sort it by interest rate.  Put the highest rate at the top of the list.

Creditor                Amount I owe                 Interest Rate                   Minimum Payment 

Focus on the highest rate debt and concentrate on paying that off first.
You are not going to get rid of debt overnight, and until you do, interest charges continue to accrue.  To reduce the speed with which interest charges are accruing, focus on the highest rate debt first.  You MUST make the minimum payments on the others.  You MUST make more than the minimum payment on your highest rate debt.

Focus on the cause of your problem.
Track your expenses until you know where you are spending money, it will be difficult to stop sending it there.  Spend a weekend going over the last 6 months bills, checks, and charges or document your expenses going forward.

Remember your expenses are optional.
Internet access and cable TV may seem like necessities of life, but in fact, they are optional.  Begin to see your expenses as choices and you will gain power as you make them.  Most people get into debt because of attitudes not income.

Get help if you need it.
Contact a Consumer Credit Counseling Service.  Theses non-profit organizations provide education and counseling to individuals and families.

A professional counselor will work with you to develop a budget to maintain your basic living expenses and outline options for addressing your total financial situation.  If creditors are pressuring you, a counselor can negotiate with these creditors to repay your debts through a financial management plan.

Under this plan, creditors often agree to reduce payments, lower or drop interest and finance charges, and waive late fees and over the limit fees.  After starting the plan, you deposit money with CCCS each month to cover new payment amounts.  CCCS distributes this money for you.

***To contact an office near you, call 800.388.2227***

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