4 New Years Resolutions To Get Out Of Debt
It’s a new year and so many of us in Mesa, Arizona and around the country have made resolutions for 2014. Lose weight. Get healthier. Exercise more. Quit smoking. Be a better father/mother/child and so forth. All of these are excellent resolutions and really something worth attaining. The trick of course is how to attain those this year and not just setting empty goals that don’t get met and “oh well, it’s another year, better luck next time.”
For millions of Americans, whether you live in Mesa, Arizona or Portland, Maine, another, very important goal is to get out of debt. This is a resolution that carries a lot of impact. Debt is crushing and can create extreme stress that individuals and families who live with debt know all too well.
Debt comes in many forms: mortgages, second mortgages, personal loans (such as to family and friends) car loans, department store debts, school loans, credit cards, medical bills and even tax debts to the IRS or to the state. Some debt is of course worse than other debt. A mortgage on a decent interest rate (say 4%) over thirty years, on a home you live in happily, is not a “bad debt”. A high interest adjustable rate mortgage debt however on a home in Mesa, Arizona that is worth far less than you paid for it and that you cannot even afford to cool all of, for example could be a very crushing debt for someone. Obviously high interest credit card loans are really stressful and “bad” for people. Even department store cards can get out of control with interest and late payment penalties.
For Mesa, Arizona residents, we are lucky to live in a great community with many opportunities. We however, have also felt the terrible burden of the crashing real estate market and its devastating ripple effects all around us on our economy. The fact that we are now finally able to claw our way up out of this morass is a blessing but we realize there is plenty of damage to clean up along the way. Some of the ripple effects include people with more debt than is able to be managed. You can be stuck in the endless cycle of paying late fees, penalties and interest only and never get out of the debt mess.
Step 1: Declare Bankruptcy
One solution to start the process of straightening out the mess is to declare bankruptcy. Contrary to what some may think, bankruptcy does not mean you are shirking your responsibilities and not paying debts. It is a legal way of getting pressure off so you can start the process of sorting through the debt. Contacting a legal professional here in Mesa is a good place to start to find out about bankruptcy.
Step 2: Stop Using Credit Cards
Another key action to take to start getting out of debt is stop putting things on credit cards. You are already in the mess you are in. Stop it – don’t make it worse because the more it grows the harder it will be to dig out.
Step 3: Eliminate Careless Spending
Step three is to start carefully tracking purchases and eliminate any careless “accidental” spending. Going to the mall in Mesa or Phoenix? Consider first what you will be purchasing and write down what you need. Leave credit cards behind. Bring only the cash you need to spend and that’s it. Then keep track of your purchases and everything you got carefully.
Step 4: Budget
Step four is to review all of your past spending habits and find what the bad habits are and where money is being wasted. Do you clip coupons? Do you waste food? Are you going to more expensive supermarkets instead of discount markets where you can still get quality for less? Second from housing, food is a very large budget item for most families and can be the average family spends in excess of ten thousand dollars per year on food. Many families looking to save money reduce food costs easily without any sacrifice to healthy eating or yummy meals. In addition to groceries other costs come in the form of cable bills, cell phone bills, home alarm systems, cleaning services, eating out, entertainment costs and other loose cash expenditures. Bottom line – grab ahold of your budget and rein it in. NOW.
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