Many people who are in debt have tried at least once, and probably several times, to pay off their debts. Sadly, a significant number of these people end up getting even further into debt than they were when they started.
What's the reason for these people accumulating even more debt? The answer lies in the methods that they use to get out of debt. Those people who take on additional debt in a desperate attempt to pay off their debts are only putting a temporary patch on the hole in their "financial ship". Debt consolidation loans can appear to work for a while, but eventually the self-defeating habit of overspending will sabotage them.
The answer lies in correcting the underlying habits that create the problem of debt. The easiest way to do this is by using a debt repayment plan that won't allow you to indulge in those old habits.
What are the steps of the best plan for getting out of debt and avoiding bad habits?
The first step in a good debt repayment plan is to create a buffer between yourself and debt. When you're running low on money, even a little financial emergency can pressure you into going back to using debt. What's a buffer? It is a small amount of savings, around $500 to $100, depending on your own unique situation. This buffer should be enough to pay for an emergency car repair, a plumbing emergency, or get you through a week or two if your paycheck is late.
The second step is to incur no new debt. That means no debt consolidation loans, no second mortgages, or any other kind of loan. People who take out second mortgages in an effort to pay off credit card debt are substituting a secured loan for an unsecured debt. The problem with that it is that if you can't pay off your debt, you lose your house.
The third step is to make a plan for paying off your debts. The order in which you pay off your debts makes a huge difference. Do if wrong, and you'll lose your motivation to pay off your debts. Do it right, and you'll pay off your debts quickly while becoming more and more motivated to get out of debt.
The next step is to work your plan. The best way to accomplish this is to make your debt repayment plan automatic. One way to do this is to use your bank's automatic bill payment service (most banks offer this service). One you set up this service, it will keep you from having to pay late fees, since your bills will be paid on time, every time. Most banks don't charge for their bill payment service, so this is a must-do item if you really want to pay off your debts.
The final step is to stick to your plan. After a while, you will have developed a little bit of momentum, and this will become easier. Once again, choosing the correct debt repayment plan can make a huge difference.
That's it: Now you know how to pay off your debts even if you have failed a dozen times. All you need is the correct approach. - 23309
What's the reason for these people accumulating even more debt? The answer lies in the methods that they use to get out of debt. Those people who take on additional debt in a desperate attempt to pay off their debts are only putting a temporary patch on the hole in their "financial ship". Debt consolidation loans can appear to work for a while, but eventually the self-defeating habit of overspending will sabotage them.
The answer lies in correcting the underlying habits that create the problem of debt. The easiest way to do this is by using a debt repayment plan that won't allow you to indulge in those old habits.
What are the steps of the best plan for getting out of debt and avoiding bad habits?
The first step in a good debt repayment plan is to create a buffer between yourself and debt. When you're running low on money, even a little financial emergency can pressure you into going back to using debt. What's a buffer? It is a small amount of savings, around $500 to $100, depending on your own unique situation. This buffer should be enough to pay for an emergency car repair, a plumbing emergency, or get you through a week or two if your paycheck is late.
The second step is to incur no new debt. That means no debt consolidation loans, no second mortgages, or any other kind of loan. People who take out second mortgages in an effort to pay off credit card debt are substituting a secured loan for an unsecured debt. The problem with that it is that if you can't pay off your debt, you lose your house.
The third step is to make a plan for paying off your debts. The order in which you pay off your debts makes a huge difference. Do if wrong, and you'll lose your motivation to pay off your debts. Do it right, and you'll pay off your debts quickly while becoming more and more motivated to get out of debt.
The next step is to work your plan. The best way to accomplish this is to make your debt repayment plan automatic. One way to do this is to use your bank's automatic bill payment service (most banks offer this service). One you set up this service, it will keep you from having to pay late fees, since your bills will be paid on time, every time. Most banks don't charge for their bill payment service, so this is a must-do item if you really want to pay off your debts.
The final step is to stick to your plan. After a while, you will have developed a little bit of momentum, and this will become easier. Once again, choosing the correct debt repayment plan can make a huge difference.
That's it: Now you know how to pay off your debts even if you have failed a dozen times. All you need is the correct approach. - 23309
About the Author:
Sean Payne has been teaching people about personal finance and how to get out of debt for over 10 years. To get more information about how to pay off debt, get Sean's excellent free course on debt reduction management.
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