Paying Off Debt

If you're finding yourself drowning in debt, you may think you'll never be able to reach the shore. Take a deep, calming breath. You can get back to financial health. It won't happen overnight, but you can get there if you work at it methodically.

Credit card debt

The first thing to do, obviously, is to stop using your credit cards. You'll never be able to pay them off if you keep adding more debt to them. You also won't get very far if you're only making the minimum payments each month. So pick the card with the highest interest rate, and pay as much as you can towards the balance on that card. Keep making the minimum payments on the other cards until "the big one" is paid off. Do the same thing with the next-highest interest rate card, and so on, until you have everything paid off.

Once you have paid off your cards, do not run the charges up again. If you must, choose one card for regular purchases, and make sure you pay the balance every month. Lock up one other card for emergencies only, and destroy the rest of them.

Emergency Savings

Even though your main concern right now is paying down your debt, you should set aside a small amount each month to go into an emergency savings account. You never know when you'll get a flat tire or strep throat, and if you're not prepared for the little emergencies, you'll end up putting them on the credit card you were saving for the big ones.

Two Jobs

If you absolutely cannot put any extra money towards your debt or an emergency savings account, you may want to consider getting a second job. All of the money you make on the second job can go towards paying off your debt or towards that emergency savings account. You could get yourself out of debt in no time!

Negotiation

You can always negotiate with your lenders and get a portion of your debt forgiven. If you feel uncomfortable doing it yourself, hire a debt negotiator to do it for you. Just make sure you use a reputable person from a reputable company.

Common Sense

Use common sense when you are trying to get out of debt. You may enjoy that five dollar cup of coffee every morning, but do you really need it? You don't have to cut it out completely, but save it for one day each week, and use the stuff you keep at home the rest of the time. Right there, you'll have twenty dollars more each week to put towards your debt.

Sell stuff you don't want or need anymore. Yard sales, online auctions or classifieds, and newspaper ads still work to help you get some extra money you can use to reach your goals.