Wednesday, January 16, 2008

Bad Debt Habit

How to Get Rid of the Habit of Piling Up Debts

In construction, We do normally hear of staff, Rolling the credit card ,due to bad debt. After reading this article, I decided to post it and hope that it will help those who needed it.

The habit of piling up debts is very difficult to break. But if you are unable to do so, you will find all your efforts to increase your income totally useless and your desire to improve your financial situation almost futile.

1. Get out of it immediately. Immediately means it is extremely urgent. You really need to be able to settle it. The fact that it has accumulated implies that it is a huge lump sum that requires your utmost attention.

2. Make a list. List all of your debts. This way, you will have more of an opportunity to minimize them as soon as possible, when they are all lined up in a neat list.

3. Prioritize which of these debts on your list need immediate attention. You need to be able to use your resources effectively and have your debts lined up properly.

4. Drive your income to the fullest. Make sure you maximize your income. Save as much money as you possibly can.

5. Know where your money goes. Track all of your payments and expenditures. What is causing your debt?

6. Be willing to make sacrifices. This may mean you have to give up your happy hour.

7. Settle it properly. Talk with people whom you are indebted to. Don’t ignore the demand letters or summons. Settle them immediately. These have monster interests attached to them the moment they get in the hands of the collection agency.

8. Make note of what you already have and what you can use at the moment. Utilize these resources and harness all possible means you can to get yourself out of debt.

9. Make sure you are able to keep good records. You can’t be a slob and be excellent in handling your finances. You don’t need a Master's degree in Economics or Business.

10. Don’t borrow money to pay off outstanding debts. This is just continuing the debts and turning them into a cycle. Get out of the rat race. Even business bigwigs like Robert Kiyosaki embrace that philosophy!

11. Always track your own progress and keep yourself motivated as you get out of debt.

12. Seek good counsel, and obey it!

13. Don’t repeat the same mistakes. Once you have gotten out of debt, make sure you don’t put yourself in the same old trap.

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