How To Get Debt-Free By 2010
Thursday, February 12, 2009 8:27
The beginning of a new year is the best time to sort out finances. Many people now have resolved to cut back our spending or start saving more money. However, for some ones, tackling unsecured borrowing, such as credit cards, loans and overdrafts, is their No. 1 priority in 2009.
Getting debt-free by 2010 might sound like a pretty ambitious target. But the following tips will put you on the right path even if you don’t think you can manage to pay off everything you owe in the next 12 months.
First of all, draw up a budget. Though budgeting could be rather tedious, you’ll need to do the basics in order to give yourself the best chance to reach that all-important debt-free day. How much cash you have available each month needs to be figured out to tackle the debts. Remember only to repay an affordable amount and don’t overstretch yourself.
Secondly, clear up the credit cards. One easy way to radically reduce the interest paid on debts is to move all of the credit cards onto a interest-free deals. Then what is need to do is cut up the old cards to stop any snowballing effect! If you are not able to turn all your debts into interest-free deals, tackle what you owe more effectively by clearing the most expensive ones first, while making sure to keep paying the minimum repayments on the cheaper borrowings.
Thirdly, pay off the personal loans as quickly as you can is the best way to reduce the interest bill. If you have a flexible loan, your lender should allow you to make overpayments, which will reduce the term. Some loans can be fully repaid early without incurring any nasty redemption charges.
Fourthly, don’t consolidate. It’s seems logical to move all the debts into one place and clear them with one easy-to-manage repayment. But don’t do this unless you are super disciplined. Consolidation loans often lead borrowers to run up even more debts in the future, so don’t fall into the trap.
If your debts are still a worry, you can seek help and advice from Dealing With Debt discussion board. Or try a free and independent debt advisory service like Citizens Advice, National Debtline or the Consumer Credit Counselling Service. Good luck with your resolution and wish you have a debt-free 2010!
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