Four Steps To Resolves Your Debt

Pay off debt or credit is a popular New Year's resolutions. If you promise to pay off your debt and start living a more balanced financial year, consider the following ways:

1. Create a list
First step, gather all your bills such as credit card statements at this time, car loans, and mortgages. Collect also all documents (both online and physical) that contains information about what you owe. If necessary, contact your lender and ask complete information about your debt.

Now make it all into one: a list of all your debts, along with the minimum payment.

2. Select the priority
After making a list of your debts, choose one and focus to be repaid. There is a double standard: you can choose the debt with the highest interest, or the debt with the smallest amount.

Mathematically, paying the highest interest debt is the most reasonable. But the motivation, focusing on the smallest debt makes debt is paid off quickly, so that makes you eager to pay off other debts.

Whatever method you use, choose a debt and paying off immediately. Pay the minimum payments on all other debts, but as you can target. In his book "Life or Debt", Stacy recommend you set aside 10 percent of your monthly income as "debt payee."

From where you can get extra money for your use as debt payee? By checking your expenses and set aside every penny possible out of your budget. Visit sites like PowerWallet to automatically track spending.


3. Use the snowball method
After paying off the first debt, focus on the next debt on the list. For No. 2 this debt, pay minimum number of installments + No minimum repayments of debts. 1 + payments "debt payee" you. After the No. 2 paid off debt, pay off debts No. 3: + minimum installment amount of debt the No. 1 and No. 2 long + money "debt" you.

Adding the amount of the old mortgage debt into mortgage debt remaining is called making snowballs, and it's a great way to pay off debt. Since you used to pay debts of some of these, but now it has paid off the first debt, still spend the same amount of money to pay the debt, but the second, and so on.

Then if you could spare "debt payee" up to the equivalent of 10 percent of your income, then using the snowball method you can pay off any debts you have, including the mortgage, the longest 10 years.


4. Look for extra money
Do you feel they have no extra money to be made "debt payee"? Once you start tracking expenses, you may be surprised.

Planning to get a slim body this year? Cancel your gym membership and do jogging, or rent a video exercise to work-out at home.

Often treatment at the salon? Try to buy a hair mask and do it yourself, or ask your friend to put nail polish to your nails than manicure-pedicure at the salon.

Conclusion - by making the budget called "pelunas debt" and apply the debt snowball method, you will stay motivated and make your debt is paid off.