Online Credit Counseling Tips

• College Students: Credit Card Debt Trap for a college student
• Instead of a New Year's resolution, make debt reduction a goal for life.
• Why is paying the Minimum Monthly Payment not enough?
• Holiday Spending: How to keep your debt load down
• Is there an alternative to debt consolidation and/or personal bankruptcy?

Instead of a New Year's resolution, make debt reduction a goal for life.

Every year, many Americans make resolutions to improve themselves. New Year's Resolutions become quite the marketing ploy as many people spend money on diets, gym memberships, and books on self-improvement. If debt reduction is on your list, along with others like the ones noted above, you may want to consider this: by spending more money, you may start the New Year with more debt.

Before you start the New Year, you may want to create a budget that includes a debt reduction plan. This first step in living debt free: creating a budget to curb overspending. By sticking to your budget, your debt will gradually decrease. Once your debt has been paid off, you can put all that extra cash into a savings account, IRA, or invest in the stock market. Soon your "resolution" will become a life long goal of a fiscal responsible consumer!

When setting up your new budget, plan on paying more than your minimum monthly payment required of credit cards. Sometimes the monthly minimum only covers the interest charged on the account. By paying more than the monthly payment, you will pay down your principal. The lower the principal, the lower the interest charges. With a new budget in hand, you can factor in other resolution expenses like gym membership, house renovation, or that new career you have been considering.

If you are living with an overwhelming amount of debt, you may want to consider a debt consolidation program from a non-profit organization. They may be able to reduce your interest rates, allowing you to pay off debt more quickly than if you did yourself.

Posted Nov 2005 [ linkback ] return home