10 powerful steps to reduce your debt

1. Save three months of income in super safe investments.

Before you aggressively pay down your debt, I recommend that you first pay for yourself by having three months of income in a savings account or other risk-free investment that you can access in an emergency. Don’t put off this emergency savings any longer. This is what you need for real emergencies. With this money, you should be able to increase your insurance premiums, not have to rely on payday loans or new debt for those unexpected emergencies, and be able to secure a secured loan to build your credit.

2. Pay off debt before you save or invest

It doesn’t make much sense to invest for modest returns when you have a credit card and other high-interest payments that exceed twelve percent. When you invest in your own debt, it’s like getting a guaranteed return on your money because you know exactly how much interest you’ll save compared to how much you could earn. You should set aside a small fund, about three months of your income, and then work aggressively to pay down your debt rather than save additional money elsewhere.

3. Renegotiate your debts and interest rates.

Call your creditors and simply ASK them to lower your interest rates. The worst they can say is no, and if they say no, put a note on your calendar to try again in thirty days. Keep trying! You will most likely find that many will reduce or change the terms to a more favorable rate that will save you a ton of money. You should also look for other lenders that will consolidate or transfer the balance at a more favorable rate. If you find yourself in dire financial straits, consider hiring a debt negotiator. A good debt negotiator can reduce interest and even the amount you owe by as much as fifty percent or more. You’ll take a hit to your credit, but the chance to eliminate half of your debts would be worth the small price you’d have to pay for a bad note(s) on your credit report that you can then fix yourself.

4. Reinvest unexpected money in debt

When you receive money as a gift, your income tax refund, and/or an unexpected refund or raise, don’t go out and spend that money. Use it to pay a bill to reduce what you owe and the interest you’re paying. Another technique is at the end of the day, take all your loose change and put it in a jar. Every month, collect all those coins and apply them as an extra payment.

5. Find lower cost alternatives

Buy used items on an auction site. Go online and look for grocery coupons on products you already use. Cancel services and use money-back guarantees for things you’re not using or need. Pack a lunch instead of buying it at work. Rent a DVD instead of going to the movies. Listen to the radio instead of buying CDs. Go to the library instead of buying books or using them online. Use price comparison websites to ensure you get the lowest price. Collect those rebates and keep accurate records.

6. Sell unused items

Sell ​​used books, cds, textbooks, etc. online through auction sites like Amazon, Ebay and Half.com. It’s easier than you think, often you only need the ISBN number to sell a used book and your customer pays for shipping. Other things like baby furniture, children’s clothes, etc. can be sold online.

7. Earn additional income.

Look for ways to expand your income that do not require investment. Write articles for websites. Get a part time job. Create items that people want to buy. Become an affiliate marketer. Write reviews on products you like and have your affiliate URL appear in your review. Start a home business and keep accurate records so you can deduct expenses like your computer, internet, and home office space to get a larger refund or reduce what you owe in taxes.

8. Get rid of bad clothes

Quit smoking and use what you were paying to speed up debt repayment. Drink more facet water instead of buying bottled water. Eat fruits and vegetables instead of junk food. Eat before you go shopping at the supermarket. Turn off lights and electrical appliances when not in use. Do not tip or give money. Buy modest, small and inexpensive gifts for your friends and loved ones on their birthdays, anniversaries, holidays, etc. Write a thoughtful note on plain paper instead of buying a three-dollar greeting card.

9. Increase your knowledge

Use free online resources to do for yourself what you were paying others to do. Go to a local high school or community college for adult education that can help you improve your job skills. Connect with others in your industry and keep an eye out for higher paying positions/careers you can apply for. Many people are experts in ingenuity, studying and collaborating on smart shopper websites online. Learn how others successfully managed to reduce their debt and learn from their successes.

10. Fix and improve your credit report.

Request a free copy of your credit report directly from the three major credit reporting agencies. Start a letter writing campaign to dispute and remove inaccurate information. This is often a battle of wills, and if you persist and proceed to push aggressively to clean your registry, it will happen slowly. Eliminating just one defective item can dramatically improve your score, allowing you access to lower interest rates to move and consolidate your high-interest debt. Write a consumer statement for the really bad brands that are confirmed to be valid and explain your situation or your dispute. To get truly accurate information, go back to the source of the information and ask the creditor to change or amend their reports. Country persistence disabled. Write them a letter every month for every bad grade you get. They only need to say YES once. Finally, apply for a free credit card and don’t use it or pay off the balance every month to improve your credit.