Debt reduction programs will not eliminate your debt overnight, but this one will help you know where you stand, help you find out how you got there and get you back on your feet and on the road to debt freedom.



The first step in the process is to list your bills. When people start experiencing financial difficulties, they often go into a state of denial. They a lot of times will stop opening their bills. People experiencing financial problems, ususally do not know exactly how much they owe and if they do, they are in most cases hiding it from their spouses'.

Begin by listing all of your bills. Include the balances, minimum payments and interest rates.

The next step is to find out where your money is going. A lot of us do not realize how much money we spend each day on small things and don't even give it a second thought. Do you buy bottled water, soda out of a machine, cigarettes? How much do you spend on eating out each week? In order to pay your bills down, you are going to have to find extra money. This can be accomplished by tracking your spending for a month. If you can find an extra $10 a day, this will give you an extra $3600 a year for paying your bills. You will probably find this step very enlightening.

The third step is to optimize the use of your credit cards. Call your credit card companies and ask them to lower your interest rate. You can also transfer your balances to a credit card with a lower interest rate. There are several credit card companies that will offer an introductory interest for a year and sometimes longer. This can save you hundreds and sometimes thousands of dollars. Try to pay two times the minimum payment, if possible. If you are carrying more than $5000 in credit card debt, this will drop your repayment period from thirty years to less than 3 years.

The step that will get you out of debt the fastest is the final one and that is to stop spending. Do not carry your credit cards with you and start paying cash. Decline credit line increases. Make only one visit to the ATM weekly and most importantly, make your credit card payments on time. Late fees and overlimit fees can become very expensive and they will also lead to your interest rates being increased.

Do not put off getting started on the path to debt freedom. The sooner you change the way you handle your finances, the sooner you will be able to sleep better at night and see the stress in your life decrease.