5 Ways to Debt Freedom
Categories: Credit Cards
Written By: Allan Henry
Why do some people fall into severe financial obligations? Your lifestyle is one of the major factors that determine the extent of your financial obligation. Generally, circumstances like these occur when you spend above your means. What then can you do to fix the situation? First things first, live within your means. It is time to change the common misconception that a man’s success is measured by the tangible things he owns. Here are five priceless guidelines to help you minimize, if not eliminate debts significantly.
1. Change your spending habits. Avoid impulsive buying and fix your budget. An excellent way to put this into practice is to stop using credit cards when shopping. Keep your credit cards at home and use cash instead. Never cash in more than your weekly budget. Make every effort to buy only the things that you need. Write them down and stick to your list.
2. Save money. You never know when the need for reserves arises. You should set aside a significant amount for contingencies. Because it is during these situations that borrowing money is needed. Substantial savings will compensate these costs and frees you from incurring serious financial obligation. If saving money is not your personality, try harder. Start keeping a small percentage of your earnings, keep it in the bank, then make regular deposits thereafter. If you fail, don’t despair. Keep trying. It always takes time to change for the better.
3. Think hard before you file for bankruptcy. Consider your options. You have to understand that with bankruptcy there is no going back. Filing for bankruptcy is a way of saying you give up. It is a notice to the whole world that you legally declare your inability to pay your debts. Even if the government sees bankruptcy as a chance for people to have a ‘fresh start’, your filing will still reflect on your credit record. Needless to say, it would injure your credit scores significantly. Once you file for bankruptcy you give your creditors the right to possibly seize everything you have to cover up your debts. You will practically loose everything! It doesn’t end there, even if you declare bankruptcy you will still have to pay $3,000 to $5,000 for legal and filing fees. Think, think, and re-think.
4. Settlement or relief programs sponsored by lawyers or banks were programs created by the banking system to convince people that they’ll spend higher amounts of money if they will not seek their assistance. But this isn’t always the case. This scheme creates additional tax burdens for the debtors. If the debtor can’t pay he will incur a massive 15% additional charge on his total balance. Other banks such as Citibank, Amex, Capital One and Discover are just some of the banks who will not settle with anybody, so this program is not really a good alternative for you.
5. Use your money wisely, purchase assets which can increase your income. Don’t spend your loans on things which will not yield positive cash flow for you. Assets are good, but be sure they are not just assets, they should also be profitable assets like marketable securities, CDs, etc.
Apply these five guidelines-make your investments worthwhile. Be responsible with your finances. Save as much as you can. Seek help from people who are knowledgeable in the credit industry. Don’t rush and always choose to live a debt free life.
Allan Henra is an expert in the area of how can i eliminate credit card debt; he has helped overburdened debtors for many years. Visit www.whatisdebtelimination.com for info on what is debt elimination and get FREE information that will save you from debt disaster
