The last debtors’ prison shut its doors more than a century ago, but many Americans still feel enslaved because of their financial choices. That’s one reason why radio and TV programs by money advice gurus and personal finance workshops are so popular today.
“The main word I hear is ‘freedom’,” says Carla Macias, who helps teach an overflowing Crown Financial Ministries class at her church in Lee’s Summit, Mo. “It’s such a good feeling to not be in debt, so much better than living paycheck to paycheck. Once you experience it, you never want to go back.”
To start working yourself out of debt:
* Put together a reasonable budget. “Don’t max out your income with just your car and house, because there’s so much more to think about,” Macias says.
* Put yourself on a financial diet. Your future may feature $5 lattes. For now, however, Folgers will have to do. Better yet, have some water.
* Pay as you go. Use cash or a debit card when you shop. Out of money? Go home!
* Pay as you go. Use cash or a debit card when you shop. Out of money? Go home!
* Freeze your credit cards. Literally, as in a block of ice. Or stash them in a safe deposit box at your bank. Your credit score can take a hit if you suddenly cancel all your accounts, so simply make your cards harder to access.
* Target accounts for elimination. Some people pay off their smallest balances first; others zero in on accounts charging the highest interest.
* Shop interest rates. Visit sites like www.cardweb.com to find lower rate cards, or consider getting a debt consolidation loan. Then call your current credit card company and ask them to match the lower rate. If they won’t, switch.
* Piggyback payments. Every time you pay off one bill, take what you would have paid on it and put it toward the next one.
* Use low yield investments to pay off high interest debt. Why tie up funds in an investment earning 2 percent when you can use that money to pay down debt charging 21 percent?
* Consider a temporary job. Earmark the proceeds and work the extra job until the debt is paid.
* Target accounts for elimination. Some people pay off their smallest balances first; others zero in on accounts charging the highest interest.
* Shop interest rates. Visit sites like www.cardweb.com to find lower rate cards, or consider getting a debt consolidation loan. Then call your current credit card company and ask them to match the lower rate. If they won’t, switch.
* Piggyback payments. Every time you pay off one bill, take what you would have paid on it and put it toward the next one.
* Use low yield investments to pay off high interest debt. Why tie up funds in an investment earning 2 percent when you can use that money to pay down debt charging 21 percent?
* Consider a temporary job. Earmark the proceeds and work the extra job until the debt is paid.
Some helpful websites:
Kiplinger’s Personal Finance (www.kiplinger.com/personalfinance)
Crown Financial Ministries (www.crown.org)
The Motley Fool (www.fool.com)
The Dollar Stretcher (www.stretcher.com)
Crown Financial Ministries (www.crown.org)
The Motley Fool (www.fool.com)
The Dollar Stretcher (www.stretcher.com)
_____________________________________
Cheryl Gochnauer lives with her family in Kansas City, Mo. You can write her at homebodies@comcast.net. Cheryl's books, "So You Want to Be a Stay-at-Home Mom" and "Stay-at-Home Handbook: Advice on Parenting, Finances, Career, Surviving Each Day and Much More," are available at your favorite bookstore or public library.
No comments:
Post a Comment