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Learn The Five Key Debt Reduction Steps You Must Take
By Vincent. Dail, Thu Dec 8th

Step 1. The purpose of this first step is to bring you back toreality. You must know exactly how much money you owe and towhom you owe it.

* Collect all of you unpaid bills and any other evidence ofyour outstanding debts.

* List each outstanding bill on the same sheet of paper. Inseparate columns, include the invoice or account number, amountdue, name of the creditor, and the date the bill can be paid infull without incurring additional finance charges.

* Total the amount due column.

* Total the number of creditors.

* Total the number of bills.

Are you surprised or shocked? Of course, most will be shocked bythe scope of their debt. Regardless of your reaction, you now(perhaps for the first time) have an exact accounting of yourcurrent debts. Debt help Considers this to be your guide,because it shows exactly how much money you currently owe, andby what date you must pay.

Step 2. This step employs a powerful visualization techniquethat actually enables you to visualize an end to your currentdebts.

* Mentally consolidate your bills. Do not think of your debt asa series of separate bills. Consider all your bills as one largebill to be repaid. As you diligently repay each component bill,your large bill becomes smaller.

* Mentally consolidate your payments. Do not consider yourindividual payments towards separate bills, consider them onelarge payment towards your one large bill.

* Debt help shows why you must continue making the same sizepayments regardless of how many bills are repaid. As bills arepaid in full, more money is available to pay other bills, butonly if your payments remain the same.

* You must pay your bills in the order of their higest monthlypayments. This allows you to apply the most amount of money tothe next bill and reduces your debts in the shortest amount oftime.

If your large bill becomes smaller each time you make a paymentwhile the size of your payments remains the same, the net resultof this strategy is that each successive payment has a greaterimpact upon the size of your debt.

Debt Example: Say you have two bills, one for $250 and one for$750. Together they total $1000. You can afford to pay $500 permonth. If you pay $250 towards each bill, the small bill willdisappear after the first payment and the larger bill is reducedto $500. You still have $500 available for the next payment. Ifyou maintain the same size payment, you will completelyeliminate the remaining bill with the next payment.

Step 3. Now it is time for a course correction - you must alteryour spending habits. Regardless of the cause, be it problemdebt or chronic debt, you must be willing to change yourspending habits and if necessary, seriously alter your lifestyle.

* Establish your long-term financial goals. It took months oryears to reach your current level of debt. Since you cannot wishyourself out of debt nor can you count on winning the lottery,you must adopt, reasonable financial goals. The more you praticemeeting even limited financial goals. The more confident and incontrol of your life you will feel. This in turn enables you tomeet longer-term goals successfully.

* Establish credible short-term goals. Short-term meanstomorrow! Durning the next 24 hours you are not to incur any newdebt.

* just get through one day, then another. You get the idea. Theimpact of this - trail by fire - is to immediately boost yourconfidence by preventing your debt from expanding. This preparesyou for the serious commitment to complete debt reduction aheadof you.

* Establish realistic intermediate term goals. These goalsshould find you becoming comfortable with the basics of debtreduction. Your goals are to implement the plan, grow moreconfident as you watch your debts grow smaller and begin torealize that you can become debt free.

* Establish, well defined, long term goals. As you master thesedebt reduction techniques , you will be firmly committed toeffecting, permanent chance in your financial condition. Notonly can you see yourself debt free sooner, but also you canrealistically see yourself accumulating wealth. You are incontrol of your financial well being. You are no longer a debtor- with

debt help you are on the road to complete debt freedom! *Prioritize your spending. Eliminate impulse purchases. Buying onimpulse addresses your wants not your needs. Seek alternativemethods to pay for goods and services: * Barter: You may be ableto barter anything of value including your time, for somethingof value to you. * Learn to live with less. you must learn tolive with the extremely limited financial resources you haveavailable, instead of the unlimited ones you pretended you had.Remember, a sacrifice is a trade-off. You give up something now;you are rewarded later. Denial, on the other hand, has noreward. it is punishment.

Step 4. Remove access to any credit you may still have. Duringthis entire debt reduction program you must learn to steer clearof bad habits. You should no more try to conquer debt while youhave access to credit, than you would pilot a rowboat thru ahurracine.

* Lockup, return, revoke, cancel, desroy or otherwise makeunavailable to you all the remaining sources of credit: creditcards, revolving lines of credit and credit extensions. * If youfeel you need to keep a credit card for identification purposessuch as when you pay by check, then choose the card with theleast available credit remaining on it. * Become your ownbanker. Do not carry your checkbook on your person. Writeyourself one check every week. This is your allowance. Cash thecheck and live on it. * Every time you receive an offer ofcredit in the mail, immediately tear it up and throw it away. Dothis even if you have to make a special trip to the incineratoror the dumpster in the middle of a blizzard!

Consumer credit is the most insidious type and the mostDifficult to give up. As you know, you will be continuallybombarded with new offers of easy, often pre-approved credit.You must ignore them at all cost. By this almost surgicalremoval of your access to credit you will come to realize thepower of the word NO! And you will become more comfortablesaying it. Step 5. Use Cash Only!

* Pay cash for everything. If you do not have enough cash topay for an item, you cannot afford it. Anticipate your expensesnow, so that you will have enough cash on hand. * Now if you donot have enough cash on hand, then cash a check at your bank ormake a withdraw from your savings account. Either way, you willneed to immediately deduct the amount from the remainingbalance. * If your account is overdrawn at the bank, please stopwriting checks immediately. If you do not know how to balanceyour checkbook, do not write any checks until you learn how todo it. You must be absolutely sure there is enough money in theaccount to cover every check issued. Under no condition may youbounce a check. Aside from any criminal liability and negativecredit reporting you may be subjected to, you will have to payan overdraft charge. This may be as much as $50 and will bededucted automatcally from the balance in your account. You alsoamy be liable for a merchants return check fee. Which can be ashigh as $25 to $50 per check. * Do not apply for overdraftprotection at your bank. Because this is a line of credit with ahigh intrest rate, you will be tempted to abuse it.

Living on cash teaches you to prioritize your spending. Sinceyou can no longer buy anything you want whenever you want it,you must focus on what you really need. Ask Yourself: Since I ampaying cash, is this something I absolutely must have? Am Ireally willing to forego something else in order to pay for thisitem now? Learn not to feel denied. Instead, think of thesacrifices you are making to achieve your long-term debtreduction goals. In order to eliminate your debts, you mustsatisfy your needs not your wants. There will be time to buywhat you want after you are in control of your finances.

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