Creating a debt plan can enable you to live a debt free life, saving you money each month; no more high APR rates that you need to consider and no more interest payments to the credit companies. Finally being free from these companies is possible, it will take a bit of planning, time and commitment.
- Write down all the information from all of your debts, include the interest rate, minimum payment, the total amount owed and the time left before the debt is paid at the current rate. This will allow you to see the bigger picture of your debts in one place, sometimes this can shock you as to the amount of debt that you actually owe.
- Plan to not take out any more debt until you have sorted out your current situation, adding to your problem will make the situation more difficult and longer to resolve. Creating a budget will allow you to plan what you need to do with your money and how best to put this money to use in reducing down your debt.
- Negotiation with those you owe money to might reduce the overall amount that you will need to pay. It is possible to ask for an interest rate reduction, or to remove a late payment fee from your account. This will help towards the amount of money that you will need to pay each month, it can also affect the total amount that will be payable when the debt is completely paid off.
Debt reduction plan
A debt reduction plan is a great way to see the debts that you owe and the amount that you can afford to pay each month in the reduction of these debts. It allows the visual impact to effect you into action; it is a great way to influence action on debt reduction. However, it is not going to be a quick fix, it is going to take time and commitment for the plan to work. This is one reason why it is important for you to plan into your budget room to manoeuvre; this gives you money to have the odd night out.
It is important that whilst you are creating the debt reduction plan you are also putting money aside for those emergencies, where in the past you would turn to credit to find these, money saved can reduce the need for these expenses to ruin any hard work that you might have already achieved.
It is possible to live a debt free life, having a mortgage is an acceptable form of debt and should only consider overpaying, if you have provisions put aside for emergencies and pension savings. When you are debt free, it will mean that you will have more disposable income each month because you are not paying for goods and any interest added on top of the bill. This can seem like a pipe dream but with careful planning and creating your debt payment plan it is possible to become debt free.