Goal: Getting Out Of Debt In 2008
When it comes to getting out of debt one of the first steps is to stop racking up additional charges on your high interest credit cards. In an ideal world we wouldn’t need credit cards and if you live within your means theoretically you don’t need them. Credit cards do come in handy though and may be the only way to pay for a necessity when cash is not readily available.
However, if our goal is getting out of debt in 2008 then we need to try and only use a credit card if it’s an emergency. If you are using your high interest credit cards to pay for essential living expenses then your outgoings (bills) are higher than your incomings (wages). If you cannot afford to pay your regular bills with your wage then you need to try and get a better paying job, work overtime, find a second job, or stop spending beyond your means. I know, easier said than done right? Well, if you want to get out of debt this should be one of the first steps.
Never pay just the minimum amount on your credit card bills. Remember, most are usually high interest so paying the bare minimum will help keep you in debt longer. Strive to pay at least an extra £5 or £10 per month on top of the minimum, even more if you can afford it.
Make your lunches to bring to work. Prepare healthier meals and avoid processed foods as much as possible. Buy generic brands for certain items like toilet paper or cereal.
To properly understand your incomings and outgoings you’ll need to sit down and write out exactly what you need to pay each month to survive. Everything else should be considered “extra”.
Write two columns on a piece of paper. Column one we’ll call “Must have” or “Must pay”. This column will include necessities like rent, mortgage, food, utilities, petrol, and so on.
Column 2 we’ll call “Extras”. This might include going to the pub, dvd rentals, buying computer equipment, unnecessary clothing, and so on.
You can even expand this to include food. Do you really need that 3rd pack of crips or that “special deal” on 24 cans of beer? Write down what’s absolutely necessary and what is extraneous.
With the credit crunch upon us for over a year now, most of us are discovering how much we’re forced to sacrifice. Take advantage of a time where we need to watch what we spend and work toward paying off your debts as quickly as possible so when the economy rebounds, we’re in a much better position than prior to “the crunch”. Work toward being debt free in the near future and for the rest of your life.