This article will give you some very important debt management tips. Being in debt over your head is a lot like being an alcoholic. No wants to talk about it and no one wants to admit that they have a problem. But before you can cure your debt problem, you have to open your eyes and realize it's there. Just like being an alcoholic can do irreparable damage to your liver, ignoring your debt problem can do irreparable damage to your financial life.
First of all, how do you know that you have a debt problem? Below is a list of the common signs that may indicate you have debt trouble. If you answer yes to any of these signs it is probably a good idea to look for ways to get your debt under control before it's too late.
1) Your credit card balances are rising and your income is not.
2) You are paying only the minimum amount on your credit card month after month.
3) Juggling bills. Borrowing cash from one credit card to pay on another.
4) You are getting final demands from utility companies and are having trouble paying them.
5) You are consistently charging more each month than you are making in payments.
6) You have no idea how much you owe and are scared to find out.
7) Your credit cards are being used for gasoline and groceries because you don't have the money to buy these things.
8) Your checking account is always overdrawn.
9) You are using payday loan services to make it until your next payday.
10) You can't talk to your spouse about finances without getting into an argument.
11) You have started selling all of your stuff on Ebay to help make ends meet.
If you recognize yourself in the above list, get your debt under control now, before it's too late.
The first thing you should do is to get rid of the credit cards. If your credit is good enough, try to transfer your balances over to a single card with a lower interest rate. Then cut up all of the old credit cards and call each of the credit card companies and have them cancel the accounts.
Close out your checking account. If you are consistently overdrawn, you are making the bank happy by paying all of their fees. Get rid of the checking account and pay with cash or money orders for a while.
Make a list of all of your bills and total how much you owe each month. If you are falling short, look for ways to generate extra money each month. Skip the morning gourmet coffee, take your lunch to work, car pool with friends to save on gas, cut back on your cable or satellite service, search for a cheaper cell phone plan and home phone plan. This list is endless. There are plenty of creative ways to generate extra income if you look hard enough.
Now take the extra income that you have generated and apply it to your bills. If you are in the payday loan trap, get out as fast as you can. The interest rate on a payday loan is like 300%. Next, pay down your credit card balance and don't incur any more debt on it. After that, move on to the next bill that is the highest and so on.
It takes a lot of grit and determination to get yourself out of a mountain of debt. But now you know some debt management tips that can help you do just that.
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