Learn The Top 4 Things Debt Elimination Experts Suggest You Do To Reduce and Eliminate Debt

At some point in our society's evolution, we came to accept credit as the most common way to acquire the things want and need in life. No one would consider buying a home without a mortgage, so it stands to reason that we would use credit for other purchases as well. Most people carry more in consumer debt than they will earn in 5 years or more. As the cost of necessities like food, utilities and fuel rise and average wages decline, we find ourselves in a consumer debt crisis. Many people are now trying to find some balance with consumer debt reduction.

There are several strategies and plans designed to achieve consumer debt reduction. There are also several companies and agencies dedicated to this newly relevant industry. Since no plan is perfect for everyone, choosing the best consumer debt reduction strategy requires evaluation of personal circumstances, finances, needs and spending habits. No matter what paid experts or consultants claim, the real work in consumer debt reduction starts with the individual. You have to take a few steps on your own before conforming to someone else's plan.

1. The Nuts and Bolts

Sit down and list your expenses in last month. Use credit card and bank statements to help you get an accurate accounting. List everything from the rent/mortgage payment to lunch and coffee. You need to really see how much you spend daily, weekly and monthly. Add this up and compare it to your monthly income. This will probably be a jarring reality check.

2. Prioritize

Many people may think that by cutting back on little things like coffee, lunch or the occasional bottle of wine will effect some change in their expenses. These cutbacks may help behaviorally but they are not likely to affect your consumer debt. The monthly payments made to credit card companies are for much more than we borrowed. Finance charges and interest payments make that minimum payment only count minimally towards the principal that was borrowed. So, rather than making yourself miserable to save $5, consider not using your charge cards to save $500.

3. Reducing Costs

Consumer debt reduction generally centers on credit card debt. It is the most expensive debt we have and the one in which we can affect the most change. Of all monthly expenses, these are the ones we can begin to decrease and work to wipe out altogether. There are some more definitive steps we can take to establish consumer debt reduction:

• Roll consumer credit balances into one larger debt consolidation loan which will have a lower interest rate and result in a lower monthly payment.
• Transfer credit balances to another account or institution that offers a lower interest rate.
• Try to reduce outstanding balances.

4. Increase Monthly Credit Payments

Once you have developed a plan to reduce monthly expenses and payments, look at the money left over in your budget. Take this excess and apply it to credit card payments. Paying more than the minimum required monthly payment will significantly lower your balance and give you the most tangible evidence of consumer debt reduction.

At some point in our society's evolution, we came to accept credit as the most common way to acquire the things want and need in life. No one would consider buying a home without a mortgage, so it stands to reason that we would use credit for other purchases as well. Most people carry more in consumer debt than they will earn in 5 years or more. As the cost of necessities like food, utilities and fuel rise and average wages decline, we find ourselves in a consumer debt crisis. Many people are now trying to find some balance with consumer debt reduction.

There are several strategies and plans designed to achieve consumer debt reduction. There are also several companies and agencies dedicated to this newly relevant industry. Since no plan is perfect for everyone, choosing the best consumer debt reduction strategy requires evaluation of personal circumstances, finances, needs and spending habits. No matter what paid experts or consultants claim, the real work in consumer debt reduction starts with the individual. You have to take a few steps on your own before conforming to someone else's plan.

1. The Nuts and Bolts

Sit down and list your expenses in last month. Use credit card and bank statements to help you get an accurate accounting. List everything from the rent/mortgage payment to lunch and coffee. You need to really see how much you spend daily, weekly and monthly. Add this up and compare it to your monthly income. This will probably be a jarring reality check.

2. Prioritize

Many people may think that by cutting back on little things like coffee, lunch or the occasional bottle of wine will effect some change in their expenses. These cutbacks may help behaviorally but they are not likely to affect your consumer debt. The monthly payments made to credit card companies are for much more than we borrowed. Finance charges and interest payments make that minimum payment only count minimally towards the principal that was borrowed. So, rather than making yourself miserable to save $5, consider not using your charge cards to save $500.

3. Reducing Costs

Consumer debt reduction generally centers on credit card debt. It is the most expensive debt we have and the one in which we can affect the most change. Of all monthly expenses, these are the ones we can begin to decrease and work to wipe out altogether. There are some more definitive steps we can take to establish consumer debt reduction:

• Roll consumer credit balances into one larger debt consolidation loan which will have a lower interest rate and result in a lower monthly payment.
• Transfer credit balances to another account or institution that offers a lower interest rate.
• Try to reduce outstanding balances.

4. Increase Monthly Credit Payments

Once you have developed a plan to reduce monthly expenses and payments, look at the money left over in your budget. Take this excess and apply it to credit card payments. Paying more than the minimum required monthly payment will significantly lower your balance and give you the most tangible evidence of consumer debt reduction.