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Personal Debt Reduction

Personal Debt Reduction Can Happen in Five Steps

By: Michael Millington


When personal amounts of debt climb to some lofty heights, it can be scary. Having thousands of dollars in back credit card payments, loans and bills, can be intimidating. However, it can be said that much of the debt that afflicts you was created without you knowing (or paying attention). With that being said, lowering or eliminating debt can work in the same way, albeit with you paying attention. These are five impactful steps you can take in order to achieve personal debt reduction.

 

Personal Debt Reduction Plan

 

Step One: Cheapen or Eliminate Unnecessary Expenses

When it comes to personal debt reduction, the quickest way to get the ball rolling is with the things you don’t need. If you don’t watch a lot of television, consider scrapping your cable plan for something cheaper (like a monthly streaming service). If you spend money to buy lunch at work, consider preparing lunch from home to save time and money. In fact, if you purchase any services outside it would pay to see if you can provide them for yourself. Do your own hair and nails or give yourself the spa treatment at home. You’ll create better habits for spending money while doing more for yourself in the process.

 

Step Two: Profit From What You Don’t Use

Most people have a few things laying around that they don’t use. A few of these things might even be in prime condition. If you have anything that fits the bill, it might be worth it to find out if you can sell it. There are multiple avenues you can use to connect something you own to someone who wants/needs it. If you’ve ever replaced an electronic because you purchased a later model, consider selling the replaced hardware. Of course, this would only apply to purchases you’ve already made (use what you have to lessen the amount of money you spend outside). Selling these items on eBay or Craigslist can result in making a profit from your offerings.

 

Step Three: Make Your Life Efficient

Personal debt reduction actually happens when you change your financial habits. When you can change your financial habits, it can give you greater control over your world. The idea is to run your obligations as smoothly as possible. Find out how you can save on the bills you have. Many mobile phone plans can be discounted through your job or by putting the bill on autopay. Many service providers can be contacted to lower a bill you have in some way. If you can’t get rid of a debt altogether, you can make it easier to deal with.

 

Step Four: Get Your Bank/Lender Involved

Having a buffer in between you and your money can help you control what you spend. This can be accomplished with a short conversation with your bank. You can set up certain limits with your bank account (or even your credit card) by informing your bank. You can limit the amount of money you’re able to withdraw or spend daily (in some instances, monthly).

 

Step Five: Budget

The main fail safe against creating more debt is organizing your existing debts and keeping track of them all. Making a simple budget for each month can have a massive impact on your debts and spending habits. Personal debt reduction takes discipline and a good strategy. Recording how much you spend, when you spend and what you spend money on can provide you with a great road map towards achieving personal debt reduction.

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