How to live a debt-free 2016

Everyone's circumstances when it comes to being in debt are different but you should eliminate all your debt as soon as you can.

Here are tips to living a debt-free 2016:

To read more information on personal finance, head on to MoneyMax.ph.

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source: www.abs-cbnnews.com

Debt Repayment 101: How to Create a Repayment Plan

Are you in debt and unsure how to start getting out? Or are you in debt, and unsure of if you want to find a way out? If so, that’s okay—tackling debt can be a little scary, but it’s in your best interests to start working your way out of financial trouble like this.

Don’t you want to reclaim your paycheck, and not have to send a portion of it off to a creditor? You should enjoy the money that you earn! If you’re tired of living paycheck to paycheck and having maxed out lines of credit, you can (and should) take action.

Read on to find out how you can get started making good financial decisions, and how to start making a debt repayment plan.

Making the Decision to Get Out of Debt

Deciding that you’ve had enough of debt can be empowering and overwhelming all at once. On one hand, you can’t wait to kick your debt to the curb. On the other, you’re worried about how to get there and the sacrifices it might require.

Let’s get this out of the way: there’s no wrong or right way to get out of debt. Everyone should go their own pace and choose a method that works for them. Some people are okay with giving up many possessions and “wants” while living meagerly. Others still want room to enjoy life.

Before you start on a plan to pay off your debt, you should outline what you want your journey to look like. It’s okay if it changes, but it helps to have a list to go off of when things get rough.

Make a list of your values, your goals, and your wants. Ask yourself what you’re willing to go without—and what you’re not willing to sacrifice to achieve debt freedom. Be honest with yourself about what’s truly worth it. Once you determine the parameters, you won’t have to question your priorities (or be upset if others do).

It’s also important to understand what you’ll be able to do once you’re debts are repaid. You can devote more money to your other financial goals. You can accelerate your progress to your retirement goals, for example, or save up for a big purchase. Maybe you want to take a round-the-world trip, or you’re ready to start paying down your mortgage.

Use these other financial goals as your motivation to repay consumer debts from credit cards and student loans as soon as possible. When you’re free of these burdens, you’ll be able to reach other money goals even faster!

What Are Your Numbers?

It’s difficult to face the reality of your debt situation. But in order to move forward with a plan, you need to know exactly where the numbers stand.

The easiest way to do this is to list out all the debts you have, like so:

Type	Lender	APR	Balance	Min. Payment	Due Date
Credit Card	Chase	11%	$3,020.17	$75.00	4th
Credit Card	Discover	8%	$7,385.28	$130.00	8th
Student Loan	Nelnet	8.5%	$11,274.32	$220.00	11th
Car Loan	Dealership	3%	$21,295.23	$250.00	20th

You don’t have to follow a spreadsheet layout. This is just an example to help you get started. Some people like putting their numbers on a whiteboard, while others people have found creative ways to measure their success with paying off debt. Pick a method that will keep you motivated.


Creating a Repayment Plan

Now comes the fun part: strategizing! Again, there’s no wrong way to repay debt. All that matters is that you’re erasing the red on your balance sheets. There are a number of options you can choose from: pick the one that makes the most sense for your situation.


    The snowball method requires paying off the loan with the smallest balance. (In the example above, it’s the Chase card). This gives you a quick win and added motivation to keep going. Once Chase is paid off, you snowball the amount you were paying to Chase into the balance with the Discover card. If you paid the minimum amount, you’d be able to put $205 toward Discover from paying off Chase.

    The avalanche method requires paying off the loan with the highest interest rate first (in this case, Chase again). The reason for doing this is that the loan with the highest interest rate is going to cost you more down the road. Interest is ugly; the quicker you can get to paying off the principal balance, the better.

    You can also try a combination of both the snowball and the avalanche methods. Maybe you want to tackle the loan with the highest interest rate to get that out of the way, but then you want to target the loan with the lowest balance to get a quick win after all your hard work.

    The emotional method isn’t an official strategy, but it’s still an option worth covering. For some people, there is a certain debt that they absolutely despise. They would do anything to get it out of their lives. If you have one like that, feel free to attack it with a vengeance and let numbers go out the window. Then get down to strategy with the rest of what you owe.


At the end of the day, what matters is that you make progress and do what is best for you. Don’t be afraid to tweak things if one method isn’t working for you. Financial plans are rarely ever set in stone because life gets in the way.


The trick is to not give up and adapt to changes, no matter how hard it may seem at first. Share your plans with supportive friends and family members – this isn’t a journey you have to take alone.

source: totalmortgage.com

The First Step to Getting Out of Debt

Have you been thinking about getting out of debt? I mean, you have entertained the idea before and paid a little bit toward your credit card once in a while, but you didn’t really take a dive at your debt seriously. If you were truly serious about getting out of debt, you would have changed your lifestyle and would be much richer today.

I strongly encourage you to take the first step in getting out of debt. I took this step over 4 years ago and have been debt free (outside of my mortgage) since February, 2011. Having money at the end of the month and being able to pay the bills without worry has been amazing. Can you imagine an ever-increasing bank account hardly trying? One morning you’ll wake up and just happen to notice that you have over $2,000 in your checking account. A few months later this amount will have accidentally grown to $5,000, and then $10,000. You then start to wonder what you should even do with it! Let me tell you though, these are great problems to have.

Take the First Step: Sell Your Possessions 

At the point when you really become serious about getting out of debt, you want to see your debt total go down, and fast. Typically, this can’t be done with your normal income because you have stretched yourself too thin (in terms of cash flow) as it is, so in order to get your debt payments rolling you’ll need to sell some stuff – obviously, the more the better.

So what kind of stuff should you get rid of? Truthfully, I would just start out selling anything that has a real value and that others would want. If you have outdoor toys like quads, dirt bikes, or wave runners that you hardly use anymore, start with those. They are in the price category that people can easily afford without getting help from the bank. At the same time though, I would put the big stuff on the market. If you have an extra car or a boat that you can really do without (you have to be honest with yourself here), then put them on the market too.

Listing your items through Craigslist is typically the best way to get rid of them. Your customers are local and can quickly come with cash to make the purchase. Within one day of listing your item you could have cash in your hand and make that big deposit into the bank.

From this point you must move on to step two (yes, I’m going to give away step 2, so listen closely). While it will be very tempting to use that money you just received to buy something else, please DO NOT! This money is first for a small emergency fund of $1,000, and then the rest of it is for putting toward your smallest debts (likely a store credit card or a gas card). Then, once you get a small debt taken care of, you can use that money you had been paying each month to that small debt and put it toward the next largest debt. Then, once that larger debt is paid for, you can take that payment and put it toward the next largest debt. This is called the debt snowball. Once it gets rolling, you can really start to pay off your debts in a hurry!

source: lifeandmyfinances.com

8 Easy Steps We Used to Pay Down $60,000 in Debt - Fast

There are plenty of ways to wind up with debt. You can acquire it as the price of a good education. You can pile it on when bad stuff happens to your house. Or you can simply spend too much money at the mall. With almost $60,000 in consumer debt, I was guilty of all of these -- and more.

Worse than just having debt, I was in debt denial. I happily made my credit card and auto loan payments every month without thinking twice about them. In my mind, I was doing the right thing. I had no idea what kind of impact my debt was having over my financial life.

Then, in the fall of 2011 my wife and I found out that we were expecting, and realized immediately that our spending habits needed to change. We didn't want our children to be burdened by our financial mistakes. Together, we made a plan we hoped would eliminate our debt before the birth of our new baby.

We didn't quite make that deadline, but 12 months later, we were completely debt free. Here's the basis behind our strategy:

Step 1: List All Your Debts, Their Balances and Interest Rates

Go to the website of every financial institution to which you owe money. Copy down all the balances and their respective interest rates, exactly as they appear. It's also important to know what your minimum payments are for every account.

Step 2: Set Periodic Goals
Short-term goals allow us to break really hard things into manageable chunks that we can feel good about after we complete them.

When you set a goal to pay off your all debt, you first need to assess how much money you can contribute to debt repayment every month. Divide your total debt by your planned monthly repayment amount. This will give you roughly the number of months it will take to become debt free. This isn't accounting for interest, of course, so understand it'll likely take you longer than that to repay your debt, but it's a fair gauge of how much longer you have to bear this burden.

Step 3: Start Paying Off Your Balances from Highest APR to Lowest

Each month, make the minimum payment on every account, then dedicate all the rest of your debt repayment budget to the one that you're trying to eliminate first -- the one with the highest APR. Over time, this allows you to waste as little as possible on interest.

When you pay off one debt, that frees up money that you can now use to tackle the next debt down the list. This concept is known as " the snowball plan."

Step 4: Trade In Big Ticket Items

Do you still owe big money on your vehicle? You can significantly reduce your total debt by trading in your car for something cheaper. If you can get $18,000 for a trade-in, and find a $10,000 car on the lot, you just came into $8,000 to help you pay off debt.

You can apply the same idea to boats, yachts, jet-skis, snowmobiles, among other items. Now isn't the time to have pricey toys. You can have toys when you're debt-free.

Step 5: Sell Almost Everything

Now that all of your big ticket items have been either sold or traded in for less expensive versions, you can start becoming a professional Craigslister.

Carry around a notebook and write down every item that you use over the course of a given week. You'd be surprised with how little of your stuff you actually use. Why not try to turn some of your less-used items into cash?

Step 6: Work, Work, Work

This one is going to blow your mind: To pay off debt faster, you can work more. Overtime, second jobs, babysitting, etc. More money, more debt repayment.


Step 7: Reward Yourself for the Small Wins

Achieving a goal, no matter how small, should be celebrated. Naturally, this doesn't mean that you should go out and spend hundreds of a dollars at the mall for paying off $100 of your debt. Instead, splurge small -- perhaps on one of those fancy coffee drinks you've (wisely) been denying yourself.

Or, as a free alternative, you can guilt people into congratulating you by posting your achievements on Facebook.

Step 8: Use Windfall Money Wisely

My definition of windfall money is "any money that you receive that didn't directly come from your employment." Tax refunds, bonuses, inheritances, birthday money, wedding gifts, whatever. If you are in debt, windfall money isn't fair game for fun. You should apply it directly to your debt. You couldn't ask for a better gift than being closer to debt free, so don't blow it.

Congratulations, You're Debt Free

Now that you've made it, teach your friends and family how they can accomplish the same thing. You'll be living proof that it's actually possible.

source: dailyfinance.com

Four Real Folks Who Overcame Their Debt

If you’re one of the millions of people engrossed in debt, it may seem like financial freedom is a distant dream.  The number of individuals living with debt in the UK has grown exponentially. In part, this is because of rising living expenses and unchanging wages. Based on a recent study, one in three Britons is in debt. That equates to £1.424 trillion in outstanding personal debt, this year alone. Although these statistics may sound menacing, it is possible to reduce and even eliminate your debt.  To prove that it’s possible, here are four average people who won their fight with debt.

Carrie Smith

Carrie Smith’s financial wake-up call occurred the instant she acknowledged her situation. At 28, she found herself with a staggering £9,300 in credit card debt. Eager to regain control of her finances and financial future, she managed to pay it all off in a year through hard work and strict budgeting. Carrie’s approach was to start with the cards which carried the highest interest rates. Most people immediately tackle the cards with the highest balance, but it’s wiser to evaluate the interest rate fees on a monthly and annual basis because that’s where you’ll be hit the hardest. To stay on track Carrie even made a timeline of her progress using a payment tool. And of course, she had to cut her frivolous spending– holidays, salon visits, cable, and dining out. The spending cuts were temporary, but the results enduring long past that year, Carrie points out.

Shari Gordon

Armed with a Master’s degree and a mountain of student loans to accompany it, Shari was unsure how she would repay the £20,000 she owed. She admits that at first she was in debt denial. When bills arrived, she barely paid the minimums. She soon realised that this approach was making no real headway so she broke down the balances into more manageable amounts and created a strict budget. In time, she was promoted at work and started looking for side jobs to make some extra money. It wasn’t easy, but Shari paid off her debt and now advises others on how to do the same.

Grayson Bell

Grayson Bell had dreams of owning his own business with his wife Jane. To bring his dreams to fruition, Grayson financed £33,000 with four different credit cards. When the economy took a turn for the worse, Grayson’s business unfortunately went under, leaving him with no substantial cash flow. As the debts piled up, Grayson continued to spend in hopes that the business would eventually recover. Two years later, his finances were still in ruin so he made the conscious decision to seek help. Grayson opted for debt consolidation as a way to fast track his financial recovery.  Consolidated Credit provided him with the tools necessary to create a budget, lower his balances, and pay off his cards. Today he’s proud to be debt free and on the road to building a new business.

Kate Flanders

Maxed out and looking for a way out, Kate was in over her head by age 25. With very little in her bank account and bills pouring in month after month she did what most people dread—moved back in with her parents.  Within a matter of month, she eliminated all the shopping trips, weekend getaways, and drinks with friends. After 6 months, she saved enough money to pay off her cards in full. Kate’s advice to people suffering from debt is to ask for help sooner rather than later.

Whether you have to create a budget, cut your spending habits, or seek debt consolidation it’s important to get a handle on your debt. It won’t resolve itself so it’s your responsibility to do your part in management and elimination.

source: everythingfinanceblog.com

6 Steps to Get Debt Free

Having debt has become a normal way of life for many people. However, you do not have to stay in debt as long as you have the discipline, patience, and drive to set yourself free. Here are six steps to start you on the right path to becoming debt free.

Make a List of Your Debts

 

In order to become debt free, you must first face that you are in debt. You need to make a list of all of your debts such as credit cards, car loans, and personal loans. By doing this, you will see exactly who and what you owe. You should also list your debts in order from lowest to highest.

Create a Budget

 

Once you have a list of all of your debts, it is time to create your budget. In your budget, you first need to list your total income from all sources and then list all of your monthly expenses along with your irregular expenses. If you prefer not to use pen and paper, several online financial software programs and apps allow you to enter your figures and create a printable budget. Your budget will show you where you money is going and whether you are overspending each month.

Cut Any Unnecessary Spending

 

If you are overspending or only have a little money left over each month, it is time to cut any unnecessary spending from your lifestyle. If you are eating out often, you may want to cut it back to once-a-week. If you enjoy shopping, you may want to shop at discount stores for only what you need. Other areas you can look at to cut cost are entertainment and cell phone plans.

 

Develop a Debt Reduction Plan

 

In order to get out of debt, you have to create a debt reduction plan that works for you. Many financial debt experts recommend starting out paying off your smallest debt first. You should apply any extra money you receive or save from cutting cost to that debt. Once the first debt is paid in full, you should transfer the same amount money you were paying on the first debt to the second debt to create a larger debt payment.

Automate Your Debt Reduction Payments

 

To prevent yourself from spending any money reserved for your debt free plan, try automating your payments. Most companies allow you to set up an online payment schedule to draft your payment from your checking or saving account. You can set up recurring payments on a weekly, bi-weekly, or monthly basis.

Create a Support System

 

In order to keep motivation, you need to create a support system. If you have family members or friends in debt, you should work together with them to stay on task. You should read financial books and online blogs for tips on becoming debt-free. If you find yourself short of money due to an unexpected expense, consider an online cash advance from CashNetUSA.

By using these six steps, you will be on your way to achieve a debt-free lifestyle.

source: everythingfinanceblog.com