Discover Debt Freedom!

In tough economic conditions it is easier than ever to get into debt. Unemployment, wage freezes and the higher cost of living can combine to create money worries for most Americans.

Research published by the nonprofit group Public Agenda suggests that eight out of every ten Americans have financial struggles, with four of these only just making ends meet.

There are strategies to help you recover from this debt crisis though, that include prioritizing, budgeting and using credit card balance transfers to your advantage. Click here to find out more.

The Federal Trade Commission offers advice to citizens and suggests that the first task is to collect all your bills together and realistically assess how much your incomings and expenditure total.

Then, calculate the minimum amount you must pay for each bill monthly. Using a spreadsheet can help you with keeping the figures in order and the dealing with the math involved.

Then combine all the minimum amounts together to find how much you need each month to honor all your obligations. If this is more than your incomings, you will need to adjust your spending.

Divide the bills into those that are necessities and those that are luxuries. We have all become used to the nicer things in life but if you can’t afford them, you have to make a sacrifice.

Necessities are those things you cannot live without, such as your home, basic food, basic clothing and money for utilities. Luxuries are entertainment, finer foods and takeaways and additional or designer clothes.

You can immediately save money by cutting out luxuries. It won’t be forever, but it will help you create a more secure financial base. If that is not enough, consider overtime or an additional job.

Experts suggest that you pay the minimum off all debts except one. For this one debt you overpay as much as possible to really chip away at the amount owed.

Once you have paid off this first debt, you can move onto another one and so on, until you are debt free. This method is called ‘snowballing’ and can help you reduce debt more quickly.

If you have credit card debts, put them in order with the highest interest rate at the top. This is known as the APR (Annual Percentage Rate) and you can find it on your statement.

You need to pay off the highest rate cards first as they are taking the highest amount of money from you. Research other credit cards at Moneysupermarket.com to find a lower APR.

Many companies offer 0% balance transfers and 0% or low APR to new customers. Transfer as much of your credit card debt with a higher APR to these cards instead.

This will give you some breathing space so that you can make savings in your budget. Use these savings to pay off the balance before the 0% rate finishes.

These steps can help you become debt-free, so invest the time and effort into making this commitment. It may not always feel easy but it will eventually bring you financial security and peace of mind.