I found these tips for paying down debt and thought I'd blog again to share them with you.
Here's how to get out of debt, according to Stacy Johnson, author of the book "Life Or Debt: A One-Week Plan For A Lifetime Of Financial Freedom."
- Curb your spending. Be able to account for every dollar you spend.
- Cancel credit cards. Cut up all but one or two so you can't use them so you can pay them off.
- Only keep credit cards with low interest rates and no annual fee.
- Track where your money is going every month. Cut back on all extras like magazine subscriptions, call waiting, extra cable channels.
- Look for lower rates on TV service, cell phone service, Internet service, auto insurance.
- Pay cash whenever possible.
- Don't borrow money to pay off debts. Home equity loans can put you even deeper in the hole.
- Make a list of your debts, then pay them off in order of the smallest debt to the largest. Once you get the small ones paid off apply that amount to the next smallest debt and keep moving up the ladder like that until all debts are paid.
- Pay off outstanding car, bank and mortgage loans quicker by doubling up on payments and attacking the principal amount.
- Call your creditors and ask if they'll discount what you owe. If you can offer a lump-sum payment, they'll sometimes settle for as little as 50 cents on a dollar.