How to Pay Off Debt
Moneyzine -
February 2009 Issue
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Melanie Fine, CPA
In this Issue
If you don't have time to read the whole newsletter, click on the topic that
interests you. This month you will find:
Thank you for reading the February Issue of Moneyzine.
This month's article is about how to pay off debt. Everywhere you turn these
days, people are talking about debt. And how the economy is in trouble because
of people spending money they don't have. All the way from large corporations to
individuals and families.
The "experts" are saying that it is
everyone's fault that the economy is the way it is. Well I don't really care
about whose "fault" it is. To be honest, all I want to do is show people how to
pay off debt, and get rid of it forever. How to recession proof themselves, so
if their job is threatened or life takes a sudden turn in the opposite
direction, they will survive - or even better thrive!
Regardless, the first lesson to learn
is how to pay off that debt and start building a future they can rely on - not
one they depend on. Imagine what the next recession would look like for you? One
without fear or doom or gloom. hmmmm sounds nice doesn't it?
So if you want to learn more about
living debt free - check out our
Debt Free
Living page.
I have also created an "Ask
the Money Expert" page for you to ask whatever question you may have about
money! If you don't have any questions, that's ok maybe you can help answer one
or too. Check it out!
Also check out our
Funny of the
Month. And of course there are the new tips on saving money. Please send me your
ways to save money!
We are always looking for ways to improve the site. If you see any errors
or would like to contribute in any way, we invite you to contact us at the
Contact Us page.
Thanks for reading and enjoy this month's Moneyzine!
Till our next issue,
Melanie Fine, CPA
PS Don't forget that tax season is on us. Get your taxes done early and save
money!
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Article - How to Pay off Debt
and Get Rid of it Forever
Debt, debt, debt, that is all we are hearing about. Corporations are laying
people off and needing bailouts from their governments. Consumers have overspent
and are in debt, some are losing their homes. Government are telling us to spend to help the economy,
but they are raising taxes to help the economy so we have less to spend. It is a
vicious circle. Want to hear a secret? You can break out of the circle for good.
It just takes a plan and determination and you can be free of it forever.
Guess what that first step is? Yes it is paying off your debt. I know you
have heard it before. Isn't that what all the personal finance "experts" say -
But really do you know how to pay off debt?
Chances are if you really did you would have paid it off by now. Or maybe you
just didn't want to. Maybe you still don't want to. Maybe you are just so
overwhelmed you don't know where to start? You feel paralyzed. Well again that
doesn't matter. All you need it to do is to get into action. Just start looking
at how to pay it off and you will be amazed how just taking that first step will
lead to the next step and the next step and before you know it you will have a
plan that you really feel you can work on and better than that - actually
accomplish. Who knows maybe you will be out of debt in 3 years - completely debt
free. How does that sound? Sounds pretty good to me!
OK so the first step:
- Make a choice right now to live debt free.
Sounds easy doesn't it? Well to be honest it can be the hardest choice you
have to make. Or the easiest - you get to choose that too. When I say that
it is the hardest choice, it could be the hardest as you will have to give
up some things in your life. There is no getting around that. It could be
the easiest choice because you will finally get to sleep at night again!
- Stop using your credit cards - live on cash.
If you stop using your credit cards, you will slow down your credit
snowball. Live within your means. It's that simple. If you can't live within
your means then you either need to increase your income or decrease your
expenses - choose. You will only slow down your credit snowball because if
you aren't paying your payments you will accumulate interest - which will be
added to your debt.
- Determine how much debt you have.
Take out all of your credit card, line of credit or any other statements
of debt you have.
Fill out a
debt schedule and determine just how much debt you have. You have to
know where you are to figure out where to start.
- Get help if you need it.
If you just can't seem to figure any of it out - learn. Go to the
library, research on the internet or go to an expert for help. Be in action
and you will be amazed at how you will come up with ways to get out of debt.
- Track Your Expenses
Figure out what your necessary expenses are. Your fixed expenses - i.e.
rent or mortgage, utilities etc. - Then take your income and subtract these
expenses. What is left over is your variable expenses. Work out a
spending plan to make sure your necessities are covered first and debt
repayment second.
- Plan how to pay your debt off.
Start with the debt with the highest interest rate. Pay the minimums on
all of your debts. Then with whatever is leftover pay more than the minimum
to the highest debt first. Keep going until the highest interest debt is
paid off. Find ways to make extra money to pay it off in chunks. Sell things
of value - take on another job. Whatever it takes. Work out how long it will
take and stick to the plan.
- Once debt is paid off start saving.
OK so you worked your plan and have paid off your debt - now what? That is
the easy part. Take the amounts that you were putting to paying off your
debt and put them into your contingency fund. Build your contingency fund to
be 6 months to 1 year of expenses. This will give you a buffer if you ever
have an unexpected turn (i.e. your lose your source of income). This fund
will give you time to replace that source of income. Next start building
your education funds for your kids and your retirement funds.
- Do not use credit cards or debt anymore.
Live within your mean. Always bring in more income then you spend. It's
that simple.
These are some steps to take to pay off your debt and never be in debt again. To learn more check out our
debt free living pages.
Dear IRS*: I'm sending you this money because I cheated on my
income tax and my conscience has been bothering me. If it doesn't stop, I'll
send you the rest. Do you have any great jokes about money, or money and
relationships?
Submit them on our
Funny Money Page.
*for those of you not in the USA - substitute
your countries tax department :-)
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Ask the Money Expert
Ask your questions about Money management, debt free living, budgeting or frugal
living.
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To find more Tips on saving money, or to add your ideas, please check out our
Best
Ways to Save Money Page.
Make a Shopping List and Stick to it.
Most important part of this - stick to it - avoid the impulse purchases and you
won't buy more than you need
Avoid Buying Water in Bottle
Buy a Refillable water bottle and fill it at home - then refill it while you are
out. Helps to save the environment as well - think of all of those bottle that
you aren't recycling anymore!
Use Your Air Miles Points for
Movie Passes
Many air miles and points programs offer movie passes as rewards you can
redeem. If you just have to see a movie in the theatre, this is a great option
to save some money.
Do you have any Money Saving Tips you would like to share?
Please
send them by filling out the form and we will publish them on the site.
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Thank you for reading the February Issue of Moneyzine. I hope you enjoyed it
as much as I enjoyed writing it. Please feel free to contact me with any
questions about
how
to pay off debt at our
Contact us Page.
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Seasons Greetings,
Melanie Fine,
CPA
www.transformyourmoney.com
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