7 Ways to Eliminate Debt

Reducing or eliminating your debt can see like an insurmountable task. You may feel like you can never get out of debt but you can. Other financial experts have been $100,000 to $1,000,000 in debt. I was $19,000 in debt making $21,000 a year and got myself out of debt. If we can do it you can too.

First, you have to admit you have a problem. Then you have to be committed to getting out of debt, just like you are committed to going to the gym, going to the hair salon or barbershop, or going shopping. Here are 7 ways to help you manage your credit card debt or any type of debt.

1. Stop spending. Don't spend money you don't have. This will result in your owing more money. Use your credit card for emergencies only.

2. Educate yourself. Educate yourself about credit and your credit rights. Read as much information as you can about credit cards. Start by reading the credit card agreement or disclosure that was sent to you when you first received your credit card in the mail.

3. Setup a debt payoff plan. Setup a debt payoff plan to prioritize your bills. By using the debt snowball method you will be able to quickly pay off some of your debts. Start by paying off the smallest bills first, then use the money paid towards a previous bill and apply it to the next bill and continue this process until all your debts are paid.

4. Setup a payment plan. Setup a payment plan with each of your creditors to pay off your debts. Be honest, humble and sincere. Identify any terms and negotiations you would like to make and stick to the terms.

5. Pay more than minimum monthly payment. If pay the minimum monthly payment you will end up paying 2 to 3 times what you actually charged due to the interest and finance charges that accrue on your balance. Try to send extra towards your balance each month.

6. Don't transfer balances. Transferring balances to another credit card may lower your credit score and there may be fees associated with transferring the balance. It is important to pay off the full balance before the introductory rate special ends because after the introductory rate ends the interest rate may drastically increase.

7. Pay with cash. Pay for purchases with cash until your credit card balances are paid in full. If you pay for an item with a credit card you end up paying 112% the original cost of the item.

6 Ways to Change Your Perspective to Get Out of Debt

I have visited several countries and states during my life. Visiting different states and countries has given me a greater perspective on my life and reminded me how grateful I am for what I have. If you are living above your means you need to change your perspective about your life. Changing your perspective will not get you out of debt overnight but will help you put things into perspective so you can see the value in eliminating your debt, managing your finances to plan for your future and restructuring your priorities in life. Many times we so get busy with life we sometimes lose our focus. One way to get out of debt is to change our focus. Here are 6 tips to change your personal finance perspective:

1. Visit another state (at least 2 or 3 states from where you currently live) and compare with your current state or city the cost of living, job salaries, health care, poverty levels, literacy levels, educational system, etc.
2. Volunteer at a foster home, senior citizen home, children's hospital, or a hospital with terminally ill patients. Talk to them and find out the things that are most important to them.
3. Make a financial contribution to a charity at least once a year.
4. Become a mentor.
5. Examine the reasons why you are living above your means and write down ways to correct your actions.
6. Set at least 3 long-term financial goals for yourself or your family, i.e. plan for retirement, setup a college fund for your children, start a business, etc. Set a date and develop an action plan to achieve those goals.


Copyright © 2008 H.E. Freeman Enterprises

5 Easy Steps to Eliminate Debt

Don't dwell on the financial mistakes you made last year. Hold your head up high even though you may be in debt. Think about how you can change your spending habits, eliminate debt and create a flexible spending plan for yourself. Here are 5 easy tips to eliminate debt on go on to lead a prosperous financial life:

1. Stop spending. Don't spend money you don't
have. This will result in your owning more money.

2. Take inventory. Write a list of all of your monthly
expenses and your monthly debts and write down
you monthly income (take home). If you have any
money left over use that to pay down your debts. If
not, find other ways to reduce your expenses and
gain extra money the money owed.

3. Reduce expenses. Find ways to reduce expenses.
Catch public transportation or carpool to work. Use
coupons or shop at wholesales stores. Have a yard
sale or donate unused items to charity and write the
amount off on your taxes.

4. Stop Credit Card Usage. Use your credit card for
emergencies only. Don't use your credit card to
purchase gas, food, clothing, etc. When using a
credit card instead of cash you end up paying 112%
more than the item is worth after finance charges
and other fees associated with credit card.

5. Educate yourself. Educate yourself about credit
and your credit rights. Read as much information as
you can about credit cards. Start by reading the
credit card agreement or disclosure that was sent to
you when you first received your credit card in the
mail. If you can't find it call you credit card company
and ask them to send you one. Read the agreement
carefully to find out what fees you could be charged,
the grace period and other important information.

Do You Know Why You Are In Debt?

In the past few weeks, I have had several conversations with clients and other experts in the personal finance industry. I have come to some conclusions about debt: 1) many people do not know how they got into debt; 2) many people are in denial that they are in debt; 3) many people do not know how to get out of debt; 4) many people believe that it is normal to be in debt or that you are supposed to be in debt for the rest of your life.

Unfortunately only 3% or Americans live debt free. First, let me say you don't have to be in debt no matter what some company or creditor tells you. Many people are living debt free lives with good credit, some people have even paid off their mortgage before the 30-year loan date! The only bill I have is my mortgage. The balance on my mortgage decreases each month because I send additional money towards my principal.

Now, the first step to getting out of debt is admitting that you have poor spending habits or that you are in financial trouble. This may be hard to do, but you can do it. If you believe that you can be debt free you will be. Next, develop a plan to take action and take action immediately. Do this by creating a budget for yourself. If you get a steady paycheck this will be easier to accomplish. However, if you do not earn the same amount of money each pay period then you can still create a budget. You create a budget by listing all of your monthly expenses (everything you spend money on during the course of a month) and list your net monthly income (after taxes), then subtract the two figures, if you have any money left over use that money to start paying off your debts and look for other ways to reduce expenses. If you have no money left over, find ways to reduce expenses, make sacrifices and think of creative ways to save money. Some good websites to use to find ways to creative ways to save money are Budgetdial and The Dollar Stretcher.

For large expenses that do not occur monthly you can spread the payment over a period of time, i.e. six months or a year. For example, if you pay $1200 in car insurance and you do not get a steady pay check, put aside $100 a month towards you car insurance so that when you quarterly or bi-yearly bill arrives you will have the money to pay for it and won't feel overwhelmed about paying the bill.

Remember if you are in debt, you don't have to stay that way, you can be debt free. I was once $19,000 in debt and was able to get myself out of debt without filing for bankruptcy. I had to make huge sacrifices such as catching public transportation, I stopped eating and going out, didn't buy any new clothes or shoes, didn't go to hairdresser appointments, etc. Nevertheless, it was worth it. I now have excellent credit, can go to any bank, and get approved for a loan.

If you have questions on how to create a budget or any other personal finance issues send me an email at hfreeman@hefreemanenterprises.com. Good luck to you!

Make this Your Year to Become Financially Free

Yesterday I was a panelist at the 2007 Tour for Success Conference. I was delighted to be amongst many entrepreneurs and would be entrepreneurs.

One thing that you should start applying to your life, which one of my co-panelists spoke about, is you should have at least 2 people in your inner circle who are doing better financially than you are. If you are the friend who is doing better financially than all of your friends or family stop paying the bill all the time and stop loaning everyone money.

Don't get rid of your current friends, just get new ones who can provide valuable advice on how to reach your financial goals or who can help you reach goals you would never have imagined.

If you are struggling with deciding how to invest you money or what to do with your money, even if it is a small amount consultant a financial advisor like Charles Schwab or Smith Barney who are experts in the field.

Make 2007 your year to become financially free by reducing your expenses, eliminating your debts, becoming a homeowner, or starting that business you always dreamed of. Good luck to you.