Presentation in a message is truly everything! Credit card companies believe in their incentive by offering, “Freedom Debt Relief” with the goal of issuing their clients another credit card payment with no interest for a period of time. It may be 18, 24, or 36 months. Is this truly freedom and relief from the very debt that binds and limits our ability to do more with our income? The larger picture is eliminating the debt, and the seemingly unlimited power of credit.
Yes, it is a challenging concept. Few Americans live strictly by the money they earn, and still have the ability to save. We all have well defined dreams and goals without providing credit card companies a substantial chunk of our hard-earned income on a monthly basis. The dream is present in our minds; yet, the first step is not to use more credit. Instead, a plan must be made to pay off debt, while saving for or having cash in hand for purchases.
Highest Interest Rates Paid First
When statements arrive either by mail or email, the balance is the only number which holds our attention. Interest rates or amounts rarely receive a glance simply because we know it is the price of not paying a credit card off in full. Create of list of your credit cards according to their interest, highest to lowest. Begin with a new plan to pay more on the cards with the highest interest. Do you need to carry the cards in your wallet? With a determination to be debt free, this is the moment to eliminate the temptation of “charging” purchases. Take the time to call customer service and learn whether you are eligible for a lowered rate. Ask if the rate could be lowered for 12 months or even six months. It certainly does not hurt to ask.
Keeping Written Track of Finances
Debt does not have to be a connected to a chain. There is a light at the end of the tunnel if we can visually see when a final payment will occur. The list of expected monthly expenses defines how much money remains at the end of the month. Consider how much additional money can be added to debt, go to savings, food and other expenses. Creating a strict food budget and offering a set amount to spend for other needs is imperative to eliminating debt. You may discover if you have a set amount, perhaps in cash, you are less likely to go on expensive spending sprees.
A Visual Challenge
Save all receipts across one week and one month. Label them according to the purpose of the purchase to understand how money is being spent. Small expenses such as a drink or candy bar adds up. If you know how you spend, you may be able to find an alternative means such as carrying snacks or a case of bottled water in your car. Think of other ways that could reduce spending.
Enter Savings as an Expense
Savings must be treated similar to an expense, and immediately placed in a savings account for the time when an emergency arises, and accessible money is needed. See if your bank has the option of setting up multiple accounts for insurance, for instance. Paying six months in advance allows the insurer to save money. Additional money that could be entered into an account are for taxes, house projects, your children, and Christmas, are included in accruing monthly “savings.” You may be surprised to discover just how much money is being saved and earning interest.
Whole Debt Freedom
Purchasing power is too easy with a credit card. The desire to analyze your spending habits and create a new plan to pay off debt can be empowering, especially when more money no longer is earmarked for expenses. The money becomes a freedom to invest in your hobbies, interests, or simply to realize a lifelong dream! It can happen. It takes a great plan, determination, and getting back on course when obstacles occur!
