If you're ready to tackle your own debt pile, here's what you need to do:
Get to know your debt
Study everything relevant about your debt such as your account balances, the interest rates, if the interest is deductible, how and when those rates can change and find out if you'll face any kind of penalties for paying an account early. If youÕre not sure call your lender and ask.
Prioritize your debt
Divide your debts into two piles; deductible and non-deductible debt. Non-deductible debt is debt where you don't receive a tax break on the interest such as is credit cards, car loans and personal loans. Deductible debt includes mortgages, home-equity loans and possibly student loans depending on your income. Once you divided your debt into piles rank them from highest interest rate to lowest.
Eliminate your debt
You can start with your highest interest rate, non-deductible debt-or the non-deductible debt with the smallest balance. Either way, put as much money as you can toward your first debt-elimination target. Once you pay that account off, take the same amount of money and put it towards your next target. Keep doing this until you have no non-deductible debt left. Next you can start tackling your deductible debt, boost your investing, or both.
How to Avoid Getting in Debt
* Pay off balances by the due date to avoid interest charges and late fees
* Charging only what you can afford to pay off in one month's time
* People who are close but unable to pay balances in full each bill cycle will still be able to put a hefty sum towards paying off the credit card which will refrain them from continued charging
* If you know you can't afford it, don't buy it
Below are some proven effective ways of cutting down expenses and saving money:
* Cut down on long-distance telephone calls or make calls when rates are cheapest
* Cut down on restaurant and take-out meals. Preparing your own food
* Bring your lunch to work and pack your children's lunch. You'll save a lot. Put yourself on a lunch budget where you treat yourself one or two times per month
* Try to reduce your home-utility bills by turning off lights when you're out of the room, being conservative with the thermostat, checking weather stripping to eliminate drafts, or air drying dishes and laundry
* Use your own bank's ATM to avoid fees from other banks
* Seek out garage sales and your newspaper's cl***ified sections for discount purchases such as toys, clothes, new and used items at a good price
* Go to matinee movies instead of the regular showings where prices are higher.
* Clip newspaper, magazine, and other print coupons
* Save on expensive dry-cleaning costs by purchasing a book on fabric care
* Use your local public library. In addition to free reading materials, many libraries offer free or reduced-price videos, audiotapes, CD-ROMs, and children's games for rental
* Practice single mother do-it-yourself repairs and maintenance around the house
* Comparison shop for clothing and household items
* Create your own greeting cards
* Avoid expensive gift-wrap. Shop dollar stores for gift bags
* Take proper care of your teeth to prevent costly dental bills
* Exercise for a healthier body and state of mind
* If you drive an automobile, learn how to change the oil rather than paying someone else to do it
* Join a co-op or food-buying club to save hundreds of dollars per year over regular supermarket prices. Call the National Cooperative Business ***ociation at 1-800-636-6222 for a list of regional warehouses
* Buy store-brand products instead of national name brands
* Shop around for the best gas prices, and plan your errands and driving destinations to eliminate unnecessary miles
* Pump your own gasoline and use the lowest-octane suggested in your vehicle's owner manual
* If you're considering getting a dog or cat, check out local animal shelters. The small purchase cost often includes vaccination and neutering
About the Author
Kelly Kennedy writes for http://www.singlemotherresources.com a great online source for single mothers and financial advice
Get to know your debt
Study everything relevant about your debt such as your account balances, the interest rates, if the interest is deductible, how and when those rates can change and find out if you'll face any kind of penalties for paying an account early. If youÕre not sure call your lender and ask.
Prioritize your debt
Divide your debts into two piles; deductible and non-deductible debt. Non-deductible debt is debt where you don't receive a tax break on the interest such as is credit cards, car loans and personal loans. Deductible debt includes mortgages, home-equity loans and possibly student loans depending on your income. Once you divided your debt into piles rank them from highest interest rate to lowest.
Eliminate your debt
You can start with your highest interest rate, non-deductible debt-or the non-deductible debt with the smallest balance. Either way, put as much money as you can toward your first debt-elimination target. Once you pay that account off, take the same amount of money and put it towards your next target. Keep doing this until you have no non-deductible debt left. Next you can start tackling your deductible debt, boost your investing, or both.
How to Avoid Getting in Debt
* Pay off balances by the due date to avoid interest charges and late fees
* Charging only what you can afford to pay off in one month's time
* People who are close but unable to pay balances in full each bill cycle will still be able to put a hefty sum towards paying off the credit card which will refrain them from continued charging
* If you know you can't afford it, don't buy it
Below are some proven effective ways of cutting down expenses and saving money:
* Cut down on long-distance telephone calls or make calls when rates are cheapest
* Cut down on restaurant and take-out meals. Preparing your own food
* Bring your lunch to work and pack your children's lunch. You'll save a lot. Put yourself on a lunch budget where you treat yourself one or two times per month
* Try to reduce your home-utility bills by turning off lights when you're out of the room, being conservative with the thermostat, checking weather stripping to eliminate drafts, or air drying dishes and laundry
* Use your own bank's ATM to avoid fees from other banks
* Seek out garage sales and your newspaper's cl***ified sections for discount purchases such as toys, clothes, new and used items at a good price
* Go to matinee movies instead of the regular showings where prices are higher.
* Clip newspaper, magazine, and other print coupons
* Save on expensive dry-cleaning costs by purchasing a book on fabric care
* Use your local public library. In addition to free reading materials, many libraries offer free or reduced-price videos, audiotapes, CD-ROMs, and children's games for rental
* Practice single mother do-it-yourself repairs and maintenance around the house
* Comparison shop for clothing and household items
* Create your own greeting cards
* Avoid expensive gift-wrap. Shop dollar stores for gift bags
* Take proper care of your teeth to prevent costly dental bills
* Exercise for a healthier body and state of mind
* If you drive an automobile, learn how to change the oil rather than paying someone else to do it
* Join a co-op or food-buying club to save hundreds of dollars per year over regular supermarket prices. Call the National Cooperative Business ***ociation at 1-800-636-6222 for a list of regional warehouses
* Buy store-brand products instead of national name brands
* Shop around for the best gas prices, and plan your errands and driving destinations to eliminate unnecessary miles
* Pump your own gasoline and use the lowest-octane suggested in your vehicle's owner manual
* If you're considering getting a dog or cat, check out local animal shelters. The small purchase cost often includes vaccination and neutering
About the Author
Kelly Kennedy writes for http://www.singlemotherresources.com a great online source for single mothers and financial advice