Analize your debt and get out!

A big mistake I have seen some people make when debt start getting out of control is to get used to being in debt. It is true that credit is the “American Way”, but it has to be credit under control. Here are some tips to organize your financial life: Determine the interest rate of your loans Determine the minimum payment on your loans Determine your monthly budget and how much you need to allocate to cover the minimun payments (You will need more than your minimum payment to get out of debt, paying minimums is the sure way to be in debt for a very long time) Sort your debt starting on the one with the highest interest rate Always pay the minimum in every loan EXCEPT the one with the HIGHEST interest rate Pay down the loan with the highest rate first and move on to the next one, make sure you are using your full “debt budget” every month. If you paid down a debt, then the payment that used to go to the first loan will now be added to the payment that used to go to the second one. This all sounds fine and dandy, but what if you get to step 3 and you realize you have no money to pay your debts? I is time to cut down on expenses and increase income. Write down every single expense (yes, even the $1 soda), categorize them and determine where your money is going. By knowing exactly where the money is going you can more efficiently cut expenses. There are many ways of increasing income. You can get a second job, start a low investment business, start an online business, sell arts and crafts, sell stuff you don’t need, etc. Guillermo Puyol Author of “Turn Ideas Into Cash! Newsletter” The newsletter features great online business ideas, advice and tools that are essential to beginning webmasters as well as seasoned pros. To learn how to start an online business and to get your free copy of the newsletter, log on to http://www.TurnIdeasIntoCash.com Other Related Topics: debt, debt reduction, how to reduce debt, controlling debt, financial advice Tag Generator: generate tags for your blog posts and increase traffic to your blog.