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Strategies for Eliminating Consumer Debt

Are you consumed with stress about mounting debt and over whelmed about how to begin chipping away at it? The light at the end of the tunnel is not an oncoming train, it’s truly financial freedom. Regardless of the circumstances under which the debt was accumulated, with a solid plan, there is a way out. Wishful thinking and a chance at a lottery win is not the solution. Every goal or objective needs a clear plan of action to be achieved. Commit today to stop worrying and start taking action. Follow these recommendations from the financial experts to systematically relive yourself of your debt. Do not turn to a debt reduction agency. More often than not this will result in ruined credit and exorbitant fees. Own the debt and pay it off. To achieve any goal, there is a great deal of self-sacrifice and self-discipline necessary. The end result, achieving your goal, is always worth the short term pain.

The first step is to clearly identify each of your consumer credit card balances and minimum payments. Take advantage of the awesome deals offered by Groupon coupons and head to  Walmart for mega discounts on spreadsheet software. Pay cash for this purchase. List all of your debts in ascending order from smallest to largest in three columns. Name of the credit card, balance and minimum monthly payments should be itemized for each card and consumer loan. Total the debt and total the sum of minimum monthly payments. The next step is to set a target date when you would like to realistically achieve your goal. This may well take more than one year depending on your income stream and degree of sacrifice you’re willing to commit to.  Determine the number of months, or weeks, between now and your target date. Divide the total debt by the number of months remaining to reach your goal.

Identify your monthly discretionary spending amount. Subtract your monthly fixed costs, rent, cell phone, gas, utilities, etc, from your monthly take home pay. The remaining amount is your discretionary spending. It is critical to understand that even the smallest purchases can add up to large sums over a period of time. If you stop off at your favorite coffee bar for a cup of designer coffee every morning, this could total upwards of $1,500 each year. Lunch with coworkers on a daily basis can add up to a staggering $2,500 or more each year. It’s these smaller purchases that need to be stopped and those savings ear marked to debt reduction. Best of luck achieving your goal of financial freedom!

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