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Debt is a word that has many negative connotations attached to it simply because it is the number one reason the vast majority of people are facing financial hardships. The big problem in our modern society is the simple fact that it is so easy to into debt. Banks, mortgage lenders, credit card companies, pay day loan services, and car loan financiers are all to willing to extend credit to just about anyone, even when they are already suffering the affects of overwhelming debt. Unfortunately as easy as it is to get into debt getting out of debt can be a monumental undertaking. It is a battle that you can win if you stay motivated to win back your financial freedom. If you are looking for ways to get out of debt then here are 10 rules to follow that will help you get started and stay on track. 1. Make a Budget – Most debt occurs because you have lost control of your money. You don't know what your money is doing or where it is going. All you know is that each paycheck is spent almost before you get it deposited. A properly done budget shows you exactly where your money is going and allows you to take back control of your financial life. 2. Stop the Bleeding – Using your budget as a guide start cutting all that unnecessary spending. Eating at restaurants, that cup of Starbucks every morning on the way to work, or anything else that you've been spending money on that isn't a necessity needs to go. Getting out of debt is about sacrificing now to have a financially secure future. Every extra dollar saved can be used to pay down that debt. 3. The Emergency Savings Account – You need build up an emergency fund of $1,000 to $2,000 for, well, emergencies. This fund is important because it gives you piece of mind while you are working your way out of debt. 4. Credit Cards – Credit card debt is a leading cause of financial trouble for millions of people. The best thing to do with them is get rid of them. Adding more debt to your problem is the last thing you want to do. Keeping them around, even if you say you won't use them is tempting fate. 5. Sale Some Stuff – Everyone has stuff, lots of stuff lying around their house or in a storage unit somewhere. Have a garage sale or start selling that stuff on eBay. The more extra cash you can make to faster those debts will go away. 6. Get a Part Time Job – Look at your budget and just for fun plug an extra $1,000 of income a month into it. Would that help? Does that change things? You can easily make that with a part time job delivering pizzas, getting a paper route, or working at a restaurant washing dishes. 7. Have a Debt Payoff Plan – Dealing with financial issues can be quite an emotional experience so you need a way to get out of debt that keeps you motivated. Consider using the Debt Snowball method where you pay off your balances from smallest to largest. While paying the minimums on all your other debts you send any extra money to that smallest debt and quickly pay it off. Then you roll that minimum and any extra money into your next smallest debt and before you know it you're rolling through that debt and paying it off quickly. 8. Learn the Difference between Wants and Needs – Things you need include your home, working utilities, food, clothing, a reliable vehicle, and insurance coverage for you home, you, and your car. A want is a new $35,000 car with $400 plus a month payments, a new leather couch, a plasma screen TV, a vacation in the Caribbean, and eating out 4 times a week. There is a difference and you need to learn to recognize what those differences are because nothing can mess up your debt payback plan like frivolous spending. 9. Stop Your Retirement Investing – This is somewhat controversial but until you pay off your debt you're not getting the full bang for your buck that you could be. Most good retirement plans have a rate of return in the 8% to 12% range. If most of your debt is tied up with credit cards there is a good chance that you're paying your creditors over 20% in interest charges every month. You are actually losing money because of the differential between those rates so it makes sense to take that money you've been investing and add it to the "Debt Snowball" and expedite your debt payoff. Once your debts are paid off you can quickly catch back up with your investments because you'll have extra money each month. 10. Get Mad – You have to attack that debt head on. I should make you mad because it is the thing that is keeping your financial future on hold. You need to dictate how your money works for you, not how it works for your soon to be banished creditors. If you are serious about reducing your debt and want more information about Getting Out of Debt please visit the website Debt Reduction and Consolidation by Clicking Here.
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