How to Get Out of Debt

by : Akhil Shahani

Are you plagued by money problems - loans, credit cards, mortgage payments and bills? Do you find yourself perpetually running out of cash, well before the month is over? And are you the type who must absolutely buy everything you can lay your hands on?

This piece will help you tackle your debts and stay away from such trouble. Each person's situation is different, so some of the suggestions might not apply directly to you. You may need to adapt them to fit your own circumstances. But they will point you towards solutions you might not have thought about.

Make a realistic budget: If the total of your monthly bills exceeds your income, that's the surest route to going broke. Prioritize your expenses to fit within available resources. Remember to pay your bills first and only then spend out of what's left.

Cap your expenses: Make sure that your total housing cost including mortgage payments, property tax and insurance is not more than a third of your income. You can go for lower insurance rates, refinance your home mortgage or look for more economical utility plans. Try cutting down on discretionary expenses like dining out, cell phones and impulse purchases. Remember, there is no such thing as a "must have diamond necklace!"

Keep track of your credit cards: Limit yourself to one or two credit cards and use them only for making major purchases or during emergencies. Pay credit card bills that attract high interest rates first. This will obviously help you minimize interest payouts.

Try using cash: We don't want to send you back into the dark ages, but using cash might just curb your spending. Leave you credit cards at home whenever you feel that urge to splurge coming on.

Avoid borrowing further: You might consider debt consolidation to help you get out of your current debt, but might end up paying a lot more in the bargain. If you must borrow, do so from friends or family members who might be willing to lend on easier terms.

Finalize repayment plans: Speak to your creditors about the debt repayment procedure, and try to secure softer terms. Once this is done, work out a payback plan and stick to it.

Spend wisely: If you're a compulsive shopper, learn to do it on the internet. That's the easiest way to find bargains and compare prices. In fact you'll be surprised to see how much you can save by using this option. Websites like facilitate price comparison among competing products. Also, remember to make a list of what you need to buy beforehand, and steer clear of impulse purchases.

Seek help from a debt reduction specialist who can help you formulate a plan for getting out of debt and staying that way. You can also learn to build wealth with an easy to use web-based wealth training system from "Ultimate Debt Relief Guide" from might also come in handy.