Tips To Get Out Of Debt

Original content by staff | added July 28, 2011

Many people have problems with their financial situation, especially because of the financial and real estate crisis from the latest years. Even if your financial situation hasn't improved in the latest years, you still have some methods at your disposal to get out of debt.

Pay your debts before anything else

Some people prefer to go directly to the mall after cashing their paycheck. They pay their debts from what remains, and sometimes we are not talking about lots of money. This is why it is better to pay the bills, rates and debts first. We know you will be discouraged once you will see that you don't have much left, but you will feel a lot better for the whole month knowing you have paid all your debts.

debt advice

Don't take a loan to pay another loan

Some people prefer to use the refinancing options to pay loans and debts. This is a huge mistake. Even if on the short term it seems like a good solution, you will see that the period of the credit is increased, and so you will have to pay for a longer period. Think about it: Say you have 5 years of a loan left with a rate of 80 dollars a mont; If you refinance with a rate of 50 dollars a month, the bank will surely expand the payment period to 10 years. So you will have to pay more in the long term.

Dump unnecessary expenses

Yes, you know that already. However, if you repeat this phrase whenever you are entering the mall, you will see that all those skirts and shoes that looked indispensible in the past will not seem so necessary. Try to resist the temptation. You will surely afford shoes that are even more expensive and fancy clothes once you are out of debts. The same principle can be applied in the supermarket. If you still need your daily beer after work, for instance, consider replacing that expensive beer with a cheaper one. You will not like it in the first days, but once you are used to it, you will feel a lot better about saving some money.

Do you have any questions about getting out of debt? Or do you have any of your own tips about for escaping debt? Please post your questions and comments in the Business and Finances section of our forums!

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