STEP 1 : STOP CREATING MORE DEBT!
You cannot even begin to think of becoming debt free unless you stop creating more debt. The first step to get out of your debt trouble is to stop adding any further debt. Don’t be tempted to use your credit cards or enter into more loan agreements just to try and pay current debts. That is debt suicide.
STEP 2: MAKE A LIST OF WHAT YOU OWE CREDITORS
Gather all your latest statements and begin to make a list of all your debt obligations. Begin with the largest balance first. List the minimum monthly installments required, interest rate applicable; as well as the outstanding balance. You might get the shock of your life when you see how many credit agreements you really have, and the total debt amount they all add up to.
STEP 3: REDUCE YOUR EXPENSES
Look at your budget responsibly and see which expenses can be reduced. For example:
– Reduce your DSTV package to a lesser one.
– Consider reducing your cell phone contract to a more affordable package. You most probably will be paying a penalty fee because of the reduced package you want to downscale too, but at the end you will save some money.
If you are using your cellphone a lot during office hours, it might be a better option for you to upgrade your cellphone. For example. You spent about 200 minutes on the phone every month on a 120 weekender package. The additional 80 minute calls made plus the calls during peak hours, can send your cellphone bill sky-rocketing. Upgrading to a talk 240, where you get 240 anytime minutes free, might be the best solution for you.
– Shop around for cheaper household and car insurance quotes with the same coverage you currently have.
STEP 4: PRIORITIZE YOUR REPAYMENTS
Add the additional money created in step 3 to the debt with the smallest balance. Once the smallest debt is paid off, use the money freed up in step 3 to pay off the next debt on your list until this one is also paid off.
This way you will not spend the money available after a debt has been paid off, but use it to pay off other debt. You will be amazed how much interest you will save.
STEP 5: GET HELP
If any Creditors are in the process of taking legal action against you, or you are experiencing trouble in meeting all your monthly debt requirements, don’t stress.
For a free debt assessment contact 0861DEBTAID. A NCR Registered debt counselor from Debt Aid debt Counseling can help you reduce your monthly debt repayments to one affordable amount, without creating more debt.