Over the last couple of years, Americans have proven their ability to effectively curtail their spending and lower their debt liability. However, debt reduction is still a highly complicated subject for many who need it the most.
Fortunately debt reduction isn’t that complex of a matter, and, provided you follow a few simple processes, you can easily strike a perfect balance between reducing your debt and managing to create, sustain and nurture a nest-egg. Some of the lesser known advice that could help shrink debt liability and help you climb out off the debt pit includes:
Avoid padding-up savings your account: Many Americans have developed the habit of padding up their savings account, cleverly terming it their ‘Emergency Fund’. But this is a bad practice in the long run. There’s a false and baseless sense of security when you keep your savings account padded but you’re only paying the minimum amount required on your monthly debts.
It is absolutely important to start paying-off your debt with the highest possible installments. Though it may appear to be a daunting, scary and even painful task, paying-off debts as early as possible allows you to become debt-free a lot sooner. Debt reduction via such technique is a surefire way to become debt free, advises Man Vs. Debt.
Maintain a healthy credit-score: This is an often stressed-on point and rightfully so. Maintaining a healthy credit rating allows you to gain the most lucrative and financially safe financial instruments right when you need them. Ironically, the easiest way to do so is continue paying off at least the minimum amount every month.
It’s the small things that suck you dry: More often than not, you might realize that you have an expensive digital cable TV subscription that you rarely utilize. Downgrading the plans and choosing the options wisely will help you significantly cut down on your monthly subscriptions, advices Becoming Minimalist.
Though the practice has substantially reduced, people often have a home-phone. Provided you have sufficient cell coverage, getting rid of the service will add to the savings. Same goes to magazine subscriptions and newspapers. Basically, it helps a lot to simply sit down and list all the utilities and services and segregate them in two columns; Needs and Wants. In case it can be classified as ‘Want’, it can be discarded very easily.
Make instead of buy: Shopping Malls and food courts have multiple items that are very easy to make at home. Instead of buying such items, it turns out to be a lot cheaper to make them at home. Natural Living Ideas has about 50 such items that can be easily made, instead of spending hundreds of dollars.
Debt reduction is a concept that requires perseverance and the resolve to start small and a strong will to continue doing it until your financial liabilities are significantly lesser than the income. Following such basic steps will help you become debt free a lot sooner than expected.
[Images Credit| JcJg Photography, Bing]