Debt Elimination – Effective Money Management Techniques

Debt as a result of credit cards is the biggest financial concern for most households today. With the current state of the economy, many people who have never had financial difficulties are living from paycheck to paycheck. To become financially independent, debt elimination needs to be a priority. Most people feel overwhelmed and don’t know where to start, the first step for many is to acknowledge the debt. People who are unused to financial hardship are uncomfortable and embarrassed. They are tempted to ignore the issue and hope it goes away.


Once the decision has been made to address the problem, it’s time to prioritize. Make a list of all bills to find out how much is owed, the interest rates for each bill and the creditors. Pay the most important creditors first. When it comes to debt elimination, the goal is to pay the highest interest rate bills first with the largest payment your budget allows. If only the minimum payment can be made, contact the credit card company to see if they will lower the interest rates. If you have a history of making payments on time, they may be able to help.

Reduce Spending

Stop spending money on non-essential items until the debt has been reduced and there is cash available for the purchase. Continuing to use credit will only make debt elimination more difficult. Reduce the number of active credit cards you have to two. The more cards you carry, the more likely you will be tempted to use them. The next step may be to renegotiate the terms of your loans.

Get Professional Help

It is usually more effective to have a third party help as they generally get better results. They work with you to find the best program to meet your debt elimination needs. This may include a debt consolidation loan, a debt management plan or debt settlement program. For consumers with significant credit card debt, settlement programs may be the fastest most effective ways to become debt free. Enrolled debt in a debt settlement program will include any accrued interest of the debt but the purpose of the program is to reduce enrolled debt by up to 40-60%, such as the program offered by Debtmerica. Many people are able to settle their debt in less than 36 months.