Money Saving Tips

Debt Reduction Tips

May 23rd, 2007

The most important lesson we have learns from getting into debt is to get out of Debt Trouble.

Have we taken actions? Yes, we have and we are. Here is our Simple Debt Reduction Method at the moment before we apply more advanced techniques for debt repayment:

Cut off our credit cards to avoid extra charges. I still keep 3 credit cards. Originally, I owned 7 credit cards! (I once boasted to my hubby that I wanted to own 10 credit cards! Silly enough!) I am waiting to snip another credit card. My hubby has cut off 3 out 6 credit cards.

Write to banks asking for lower interest rate. Now, our interest rate is between 9% to 12% per annum. 18% per annum is really a burden.

Spend less. Many people have the impression that Women are the Big Spenders! Wrong, you guys. My hubby is the big spender here. Again, you get him wrong. He doesn’t smoke, drink or flirt. He is just a watch maniac! He likes admiring, buying and keeping watches. Make all of our minimum payments early or on time. Use cash if possible.

If your debts have been getting you down recently, here are 10 great ways to start slashing them today:

• First off, consider going on a “cash diet” for the next few months. Lock away some of those credit cards in a safe deposit box… or just cut them up altogether! By all means keep a low interest rate card for emergencies, but definitely rid yourself of any store cards. Why? Because they encourage you to buy junk you don’t need at exorbitant rates of interest!
• If you think you can afford to pay off any of your loans in one go, approach your lender and offer a reduced final settlement of anything between 25 and 75%. Try and get the best deal. They can only say no, and might just say yes to get some money in. When I was deep in debt, I was fortunate to pay off a bank overdraft in this way. In fact, they proposed straight off a settlement of 75%… not me!
• Ask for a promotion at work. Believe it or not, it’s estimated that one in two people who actually do this get one.
• Shop around to get the best deals on utilities like gas and electric… A home energy audit can help save hundreds of dollars a year on heating bills. Ask your supplier who may be able to this for free or at very low cost. Many countries now have websites where you can make sure you’re getting the best deal. Try doing a web search for “energy savings” plus your country. Also, make sure that any new appliances are energy efficient. This alone can save you hundreds of dollars a year.
• If you have a spare room, why not consider renting it out for a while.
• Check to see you’re paying the right amount of tax. You might possibly be due a refund. Every year governments rake in hundreds of millions in unclaimed tax. You can get free software programs to help you with this.
•  Have a direct debit set up so that your debt payments leave your account the day your paycheck is paid in. That way, you’ll be less tempted to spend it. And when you do get out of debt, charge a direct debit to another account and pay in a regular monthly amount (as much as you can afford.) Call this your own personal wealth insurance. You’ll never regret it. By adopting the above strategies, the light at the end of the tunnel will start shining that little bit brighter. Instead of spending more than you earn, you’ll soon be earning more than you spend! Good luck!

Does it sometimes seem like the dollars are slipping through your fingers while the bills just seem to keep mounting up? It’s a familiar feeling for many of us nowadays. Sometimes, though, like most things in life, taking a step back from it all and starting to get some simple things right can make a huge difference on the big picture

Tags:  credit cards debt repayment interest rate card Making Money reduction method safe deposit box

Share This

Entry Filed under: Making Money