Debt Reduction - A Program To Do It Yourself

Need a debt reduction program? Don’t despair, here are some tactics you can use to help yourself, starting now.

1 - Stop Paying With Credit Cards

The place to start is by locking away the credit cards and figuring out how to cut expenses back to function within your income. Figure out how to make more income and pay only with cash. This is the one action that jump-starts your program to get out of debt. This step is critical to your program if you truly want to be debt free.

2 - Don’t Obligate Your Company To Pay More Than It Is Making In Income

You commit your company’s future production to the credit company when you pay for an item with a credit card. Then you experience economic slavery. Ask yourself if you just want the item or if you really need it to increase the production of income. If the item will increase the business’ production of income, work out how to set aside the cash to pay for it over a short time period instead of whipping out the credit card. Find ways to increase the company’s income and use it to pay both current expenses and pay off credit debt.

3 - Always Pay More than the Minimum Payment Required

To be really effective, your program should include using 10% to 15% of the business’ weekly income to pay against the debt. Set a goal to pay at least 3 to 5 times the minimum required payment on each credit card and line of credit. Set aside a portion of the payment money each week until the statements arrive in the mail. It’s always easier to stash away smaller amounts over 4 weeks than scramble to come up with the whole amount out of one week’s income.

Paying more on the highest interest rate card is an effective debt reduction tool you should use in your program. An additional tactic is paying off the lowest balance cards as fast as possible. The money you were paying on those low balance cards becomes available to pay off the highest interest rate cards.

4 - Never Spend Over The Card Limit Or Pay Late

Never sabotage your debt reduction program by getting hit with $25 to $39 over-the-limit or late fees plus the interest on those fees. In addition, if your payment is more than 30 days late, your credit record carries that big black mark against you for 7 years - a whopper of a penalty.

In a news report, a Vice President of a U.S. bank recently said that more than 24 Billion dollars was paid by consumers in the past year on credit cards for over-limit fees, late payment charges and interest. The credit company may fuss at you for paying late or going over your card limit, but they really don’t mind when your mistake makes them billions of dollars every year.

5 - Cut Back on Expenses

An effective program to reduce debt requires as much extra cash as possible and as fast as possible. Evaluate where your business’ income is going and reduce all unnecessary expenses that do not contribute to increasing the income. Before you spend, evaluate how much money each and every purchase is going to return to your business.

TIP: Continue promoting your your business’ products and services to everyone - don’t cut back on that activity. Just make sure your promotional spending is bringing more money back in than what was spent.

Managing a company’s income correctly to make sure it survives takes more than a debt reduction program, but this is an excellent place to start. There are other tactics you can use to increase the business’ income, pay bills when they are due, have savings for emergencies, increase profits and pay yourself more money. You want that, right?

Sandra Simmons, President of Money Management Solutions, has years of experience helping company owners and families manage their income to eliminate debt. To learn more about the Money Management Software she created, visit her website and watch the FREE 5-minute demo video at www.MoneyMgmtSolutions.com

- Sandra Simmons