Here is wisdom ...
{Pro 22:7 KJV} The rich ruleth over the poor, and the borrower [is] servant to the lender.
I recently read how most American adults are in debt to the tune of $20,000, and most Canadian adults are in debt to the tune of $17,000. Whether or not you realize this ... you are a slave, a SERVANT, to the companies you owe money to. Because you've lived beyond your means, in that you bought things on credit rather than by cash alone (as had we), you are now suffering the consequences. Here’s how we got out of our $25,000 debt within about six months. Yes, just six months, we were shocked too!
Line up all your monthly bills. Look to see which one requires the most payment and put them in order of highest payment to least payment. Take the highest payment due and put every penny you can spare on it, do NOT just pay the minimum, always pay MORE than the minimum for this highest bill. Put every cent you can on that highest bill. If you can sell a secondary car for instance, slap all that money onto the credit card bill that you are currently working to pay off. For all your other bills you will just pay their minimums and no more.
Once that highest debt is paid off ... GIVE YOURSELF A PAT ON THE BACK ... then move on to the next highest bill and put all the payments you were making on the first one (now paid off) onto the second one and pay as much as you can on that one while paying only the minimum on all the others. You will begin to see the *snowball effect* (see Dave Ramsey links at the bottom of this page) after the first bill is fully paid off. Continue doing that until you get the second one paid off and then take all the first two bills worth of payments and put those onto the third highest bill and so forth. As you pay off the highest ones you take all the money you were paying into for those and put that (now extra) money into the next bill. Do NOT use said extra monies for anything but to pay off the next highest bill!
In the beginning, the hardest bill to pay down will be the highest one. But by the same token the highest bill is likely also taking the biggest chunk out of your bank on a monthly basis. To pay that down you will have to scrimp and save. Learn to do with less, live modestly in every way you can. The more you don’t spend on stuff you don’t need the more you will have to put towards that highest bill. You will have to limit your spending on such things as going out to eat ...or... buying jewelry ...or... that extra super cute pair of shoes ...or... that kewl toolbox *because* ...or... other things you don’t really need. Only buy necessities and nothing more! And do NOT use your credit cards, as a matter of fact ... CUT THEM UP! Sell stuff you don’t use often and put that money towards the bill you are working to pay off. Bills you may owe on a monthly basis that qualify for this *debt reduction* are: Home Loan; Property Taxes; Boat, RV, or Vehicle Loan; Student Loan; Credit Cards; monthly bills such as utilities; or anything else for which you've racked up a yearly or monthly payment due.
Look at what your normal monthly bills are such as power, TV or internet, etc ... see where you can cut down on those, like: turning off lights when not needed (you'd be surprised how much is wasted in power), calling your TV provider to see what their lowest plan is, cutting down on your internet usage, etc. For example, we were paying $120/month for satellite internet and although it crimped our surfing somewhat we went down to the next lowest plan of $80/month, and if it would have been necessary we'd of gone to the lowest of $50/month or eliminated it altogether for the duration. Remember, such reductions should be only temporary until you get those debts paid off. If you really want to be out of debt then some sacrificing will be worth it to you in the end when you become liberated from this world's modern financial ways.
By the way, it may take you longer to pay all your credit cards off, depending on how much you owe. We had two major bills: one was our RV loan totaling around $15,000 and the other was a credit card bill of around $10,000 ... once the first one (loan) was paid off we saw the *snowball effect* (see Dave Ramsey links below) when we put all the first bill's payments towards the second bill ... so it didn’t take as long as we had anticipated to become DEBT FREE! We were hunkered down and prepared for the process to take two years so we were pleasantly surprised to get it done in a 1/4 of the time! We scrimped, pinched, and went without on other things to get the extra dollars onto our highest bill. We even sold some things and put that money towards paying it down. It may take you as long as two years to pay off your debt but let me assure you there is nothing as liberating as being debt free. Make up your mind to do this and then DO IT! Get on the path to freedom and don't look back.
***BEGINS RANT***
Don't believe ads, commercials or other financial hype, that you can do life with credit, that's a lie from the pit of hell! It's a trick to enslave you to making monthly payments to companies that make a living off being your "provider". Remember the opening scripture of this article! Now, if you don't mind being a servant (slave) to the lender then by all means continue living in poverty.
***ENDS RANT***
Once you’ve paid off all your debts then do take yourself out for a nice celebration BUT THEN continue to live frugally (you really don’t need all that excess anyway). Live within your means ... only buy what you can afford to pay cash for ... you know ... like the *old days*. Don’t fall into the debt scam, especially the "buy now, pay later" trick. Be wise. Be free. Just like any other addiction (yes, I consider debt an addiction) it's easy to get in to it but not so easy to get out of ... unless you are willing to commit to getting out of it and set your eyes on the prize of freedom. In other words, if you can’t afford to pay cash for something then work to save up until you have enough, or go without.
Dave Ramsey's website was monumentally helpful in our search for financial freedom and although we don't have much these days in the line of monthly income (we're living on a meager retirement) we are no longer in debt. Freedom from debt is a liberation worthy of your time and effort to accomplish ;o}
Check out Dave's website ...
http://www.daveramsey.com/blog/get-out-of-debt-with-the-debt-snowball-plan/
http://www.daveramsey.com/baby-steps/
Thanks for reading and may the Lord walk with you as you learn to ...
{Rev 18:4 KJV} And I heard another voice from heaven, saying, Come out of her, my people, that ye be not partakers of her sins, and that ye receive not of her plagues. {"her" = satanic worldly ways}
{Curly bracket comments are mine.}
