Reduce Your Debt: Know, Control, and Plan

By Debbie Wilson Columnist

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Debt is more than just a problem. For many Americans, it is a way of life. But that doesn't mean you have to live the life of financial overspending. Reducing your debt starts with knowing what your actual debt really is, controlling your spending habits, and planning your debt away through proven debt consolidation techniques.


Know Your Debt

The first major step in debt consolidation is to know what debt you've actually incurred and where the debt came from. This can be done by simply writing down all your current monthly bills and expenses. Don't forget credit card debts, auto loans, and mortgage payments, in addition to utilities, cable, garbage, water, etc. You might be surprised at how much debt you accumulate over the course of a month.

Control Your Debt

Making debt consolidation your number one priority is the best way to take control of your debt and your life. Most debt reduction starts where credit ends. This means no more charging. Put the credit cards away and start paying with cash. Consolidate cards, keeping only one or two low-interest cards for emergency purposes. You can also contact your creditors before they contact you. Set up a payment plan and negotiate an extension. Finally, if you are unable to consolidate your debt on your own, consider debt counseling services.

Plan Your Financial Success

According to the Fair Department Collections Practice, you can safely direct 12-15% of your income towards debt repayment. That means you'll want to calculate your current and future income, considering any ways to add additional income, and then develop a clear cut budget. Your budget should take into consideration which bills are essential (mortgage, utilities, food, school loans, etc.) and which bills are avoidable (eating out, new clothes, credit card interest, etc.) Keep your budget realistic.

Take time to think about where your money is going and what you want to do with your life. Then make the decision to take control of your debt through a customized debt consolidation plan. Soon, you'll be living your life the way youve always dreamed rather than through the eyes of your debt.

About the Author
Debbie Wilson owns and operates a lakeside resort. Her previous experience includes profitability consulting for a national healthcare company. Debbie holds a B.A. in Business Management with a minor in Physical Education.

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