Get Out of Debt Using a Laser-Like Focus

Have you ever tried to focus on accomplishing five different tasks at the same time? Or three? How did you end up performing them? Were you satisfied with the outcomes?

I am a linear kind of guy. When I try to do two things at once, both suffer. They take longer to accomplish than if I worked one from start to finish and then tackled the second project. If you have ever heard the phrase “the sum of the whole is greater than the sum of the parts”, this describes my multitasking skill!

Paying off debts can be the same. The commercial I hear on the radio about “put an extra $10 towards each of your loans” sounds good. After all you are paying back some extra principal. But when you do this with a car loan, two credit cards and a store loan, you do not see any progress.

I always recommend to my clients that they pick ONE debt to throw their weight against. Pay the minimums on everything else and put the extra principal towards that one account. Highest interest rate, lowest balance, I do not care. I want my clients to see BIG progress against a bill.

When I was in the midst of my debt, I was paying extra towards each debt. And I was getting more and more frustrated. Why? Because I was not seeing any real progress. The extra $50 or $100 towards our car loan did not look like much compared to the $10,000 balance. But when we began to pay $500 extra each month towards our $2000 orthodontist balance, we saw big decreases FAST.

My motto is “Know Debt + KNOW Debt = NO DEBT”. The results you see from seeing that one debt drop quickly keeps your heart in the game (KNOW Debt). This supports your brain (Know Debt) and the two working together will get you to NO DEBT.

Think of the sun. When it shines down on you, you feel warmth. But when you shine it through a magnifying glass, you have the power to burn things!

Or think about boiling water on your stove. If you put a pot of water out in the sun, the water gets warm but only tepid. Put that same pot on a stove and the water begins to boil rapidly.

Focus your extra money on one debt at a time. You will remain excited about your plan towards debt freedom because you will see and feel positive progress. The intensity of that magnifying glass will burn through your debts in no time!

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Ways You Can Increase Your Savings and Avoid Getting Into Debts

INCREASE YOUR SOURCES OF INCOME: This scheme is as old as the time of the development of commercial. Making more money is not easy, but when you widen your business outlets, there is bound to be a rise in incomes. There is no compulsion in any particular type of business you engage.

However, you must seek some understanding of the endeavor before dabbling in. Liken the scenario to the difference in the volume of water received when a single tap is opened to that when about four or five are opened simultaneously. More incomes translate to higher spending capability and less or no indebtedness. Surplus incomes enhance savings.

REDUCE WASTEFULNESS: There is no other habit as bad as wastefulness. Over spending and extravagance are other habits tantamount to it. Experts say that debt occurs, often, as a result of being wasteful. You should use just enough and desist from being extravagant. Save the rest for future usage. There is wisdom in that.

To reduce or avoid debts, do not over spend. Do not go to buy what you do not need, at least, for the immediate and the foreseeable future. Put the excess money into saving.

SET PERSONAL FINANCIAL GOALS AND MAKE BUDGETS: Who ever fails to plan; plans to fail. Set realistic financial goals and spending plans. Learn to make budgets in line with your income and make all possible effort to abide by it. Being within a specific budget regime helps you prevent unnecessary spending.

Goals are meant to be achieved, although, some could be hard, but at the least you will know that you have given it a trial. It helps you become more focused and determined. Budgets mean you will do just what is necessary. When there are excesses, you can save and forestall running into debt.

KEEP TAB WITH YOUR PROGRESS: There should be a feedback mechanism in your planning and budgeting scheme. Do checks and balancing regularly and periodically. It affords the opportunity to evaluate your progress. Practice, as it is usually said, makes perfection.

If you are faithfully interested in riding yourself of debts and improving your positive balance sheet, you must monitor the adherence to your budgets and the focus on your goals. Take decisions that will make adherence easier and realizable.

BE REALISTIC; KNOW THAT THERE COULD BE CHALLENGES: Life is not a bed of roses. Wishes are, certainly, not horses. That is the reason why beggars are possibly unable to ride. There are obstacles and challenges that could stand in your way against adhering to your scheme.

The main reason is that other unavoidable responsibilities can spring up. There are ups and downs littering the paths of life. That is the more reason for making realistic budgets that can take care of all possible exigencies. You should anticipate and be ready for life’s ups and downs. There may be some emergency funds set aside to take care of these.

GET KNOWLEDGE; BE KNOWLEDGEABLE: Make effort to acquire knowledge in whatever necessarily available means. Modern economic situations demand learning in constancy. Read books, listen to lectures and talks, and ask questions about issues and topics that bother you.

Acquiring wealth and sustaining it need financial knowledge and understanding. Although it is not yet a serious in this part of the world, yet it is a good way to managing your finances; get a financial adviser. You could get rightful directions on what to do with your finances, boosting your savings and avoiding debts.

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Best Ways to Pay Off Debt That Are Easy on Your Wallet

Excessive debt can be intimidating, especially when attempting to find a way out. When making only monthly minimum payments, it can seem like the debt will take forever to pay off. So for many, the best solution becomes just not thinking about it.

This is not the best course of action.

Although there are no quick fixes, there are options. Some of the best ways to pay down debt are painless. Here are a few ideas that include the best ways to pay off debt.

Renegotiate Interest Rates

An easy action to reduce your debt is to renegotiate the interest rates on your credit cards. Call the customer service representative number on the back of your credit card. Explain that you are dissatisfied with your current interest rate and would like to know if there is a way to get it lowered. If the customer representative won’t help, ask for a supervisor.

Here are some other methods for the best ways to reduce debt:

The Snowball Approach

Massive snowballs start with a handful of snow; so does your debt reduction plan. Begin by working on paying off your smallest debt first, then continue until you have paid off your largest debt. The first step is to write a list of your debts and the amounts you owe, from least amount to largest amount:

$455 store charge card ($45 payment)

$2,000 medical bill ($60 payment)

$5,250 credit card ($140 payment)

$12,000 student loan ($226 payment)

Start by making minimum payments on all your debts, except the one with the lowest amount -store charge card. Every month for this card make as large a payment as you possibly can. When that card is finally paid off, use the same steps and pay as much as you can toward the next lowest debt – the medical bill. Redo these steps until you are able pay off your largest debt – the student loan.

Biweekly Mortgage Payments

The next step is one of the best ways to reduce debt for larger issues. A good technique to produce big savings and more financial well-being is by making biweekly mortgage payments.

In this scenario you pay half your regular mortgage payment every other week instead of the entire payment once a month. With this technique you’ll be paying 13 yearly payments rather than 12.

Your mortgage payment will increase by 1/12th, but the additional amount goes toward your principal. You never pay interest on any part of the mortgage you pay off early. The amount you save can quickly add up.

With a 30-year mortgage for $272,000 at 4.25% APR, this option alone can save you more than $34,000 over the span of your mortgage. You could be paying off your mortgage five years early! The biweekly payment plan also works for other loan types.

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