List all monthly bills and necessities and make sure they are covered by your monthly income. Allow only the money remaining after the bills are paid to be spent elsewhere.
Pay off the credit card with the highest interest rate first (unless the balance on any card exceeds 50 percent of your credit limit).
First, pay all balances to below 50 percent of the card limit. Balances above this level cause your credit score to diminish. Then pay off the balance on the credit card with the highest interest rate. If the account was opened within the past year and you have additional older accounts, close it after it is paid off. Next month do the same with the card that has the next highest interest rate. Continue until you reach the credit card with the most favorable terms (i.e., low interest rate).
Learn to use cash instead of credit cards.
Have one primary credit card and use it only for emergencies or major necessities. Put your credit card in a safe place, not available for everyday use.
Cut down on your discretionary expenses.
This includes dining out, overusing your cell phone and other unnecessary expenses.
Evaluate your living situation.
Your housing costs should be no more than 33 percent of your household income, including mortgage payments, property tax and property insurance.
Only borrow money to get out of debt if you know you can pay it back.
Consolidation loans are a means of combining debt and making one payment for all bills which is helpful if you stick to your monthly payment plan.
Contact your creditors and try to work out repayment plans.
Many creditors are willing to work with you in a manner that will help them get their money without having to resort to debt collectors.
Become a savvy shopper.
Look for deals, bargains and savings. You’d be surprised at how much you can save if you take the time to shop around.
Look for extra ways to make some money.
From part-time work to a garage sale, there are many ways to bring in some additional income.
Founders offers free Financial Counseling to all members.
They can help you make a positive, lasting change by learning disciplined techniques to lessen your debt and become more financially stable. It’s easy to get started. Simply call 1-800-845-1614, visit your nearest office, or go online to www.foundersfcu.com.
This article was published in the Founders FCU's Transaction Newsletter (July 2010). Article source is allbusiness.com