Debt repair

● When you are working on your debt repair, the following diligence can make a huge difference: keep track of your spending. How much of your money are you throwing away when you could be using it to reduce your credit card debt?

Use http://quicken.intuit.com/.

Download your bank statements and enter them into the Quicken software. Try to do it once a week. With such frequency the transactions will be always fresh in your mind. Try to figure out where every penny goes.

It can not be stressed enough - every dollar you save is earned money and can be used to pay off your debts.

● Don’t throw away your cash on things you can go without - cut out every day expenses. Are you spending 10 dollars on lunch each day? Make your own sandwiches for under 1dollar. If you are buying magazines from a news stand, just stop doing it and borrow them from the library. If you are buying the newspaper every day, you can stop and read it online.

It all adds up to money you can use for your debt repair and it adds up quickly.

● When buying something, you need to be careful you don’t spend more than you earn. Figure out ways to earn more than you spend. Try to sell some things you don’t need before you buy a new lap-top, for example. Try ebay.

If you do this whenever you want to buy something, it will make it easier for you to afford whatever it is you want to buy. This strategy will help prevent you from growing your debt even more.

● You should be paying off your debt instead of saving money at a low interest rate. If you have thousands in credit card debt and are paying 18% interest on that, why put into savings account your money at 2% interest. You could be earning 18% interest on your money by paying off your debts and not having to pay it any longer.

Be realistic when you are saving money and look at the amount and interest rate of your credit card debt and compare it to the interest rate you are earning from a savings account.

You better use some of that extra cash to pay off your debt.

● Beware of high credit limits. Once you pay off a credit card, call the bank and ask them to reduce your credit line. Do you really need a $20,000 line of credit? It will be harder to spend as much money if you don’t have that kind of credit line. It will also keep your debt from getting out of control.

● A lot of people spend the whole year trying to reduce their debts but then find themselves with thousands of dollars of new debt after the holiday season. Is this a debt repair ?

Don’t let that be you - plan ahead for the holidays and think about contributing a small amount each week into a “Holiday” account.

● If you are making a reasonable effort to pay off your bills, i.e. you are making monthly credit card payments, the odds are you either have received or are qualified for a 0% interest balance transfer credit card offer.

If you make the same payment each month with 0% interest, you’ll pay off much more of the principal. Every cent you don’t have to pay in interest is money you can use to pay off your credit card debts.

● A great way to budget is to take out the cash you need for gas, food, bills, etc. and put it into envelopes.

This will force your financial discipline which is a prerequisite for your debt repair . Why?

Because, if you want to buy a new furniture, for example, the money will have to come from somewhere, right? So you either eat less food, use less gas, etc. or buy a new furniture. Got the picture?

● Make regular payments to your credit card company each month and on time. This will affect your credit score for the rest of your future life.

When you got that credit card you signed an agreement saying you would pay your credit card company per your cardholder agreement. Now that you are in debt, don’t forget how you got there.