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Archive for May 8, 2017

6 Strategies to Get Out of Stacking Debt.

Debt-free-strategyMost homeowners aspire to be debt-free, but many do not think about it. This finds from the results of a Bank poll that three out of four homeowners consider to be debt-free becomes their highest financial priority.

Although the lack of knowledge is an area of concern, the gap between hope and reality also keeps us from paying close attention to our debt. The survey found that 55 percent of people aged 30 to 39 expect to be debt-free at age 50; However, only 17 percent in the 50 to 59 age group actually have debt.

Why is there a gap of optimism in our youth and reality as we approach retirement? One reason is the lack of willingness to ask for help when it comes to managing our debt.

STRATEGY TO HELP YOU TO BE FREE FROM DEBT
If you want to get out of debt, but do not know where to start, here are six strategies to get you on the right track:

  1. LIVING IN YOUR MEANS.
    Few people actually know consistently spend less money than they earn. The solution is simple, create a budget and obey. Then, check your earnings and expenses on a regular basis to ensure that you actually spend them within the limits you’ve set. The budget will help you differentiate between ‘needs’ and ‘wants’ and also helps you ensure that you are setting aside enough money to achieve your long-term financial goals.

    2. PLANS FOR NOT REQUIRED.
    One of the biggest challenges for many people trying to be debt free is the unexpected cost. Remember that even with a solid budget in place there will be unexpected charges along the way. To avoid this incident wake up an emergency fund that you can touch if you press the rough button. Or, if your contingency plan involves a short-term loan, make sure you have easy access to a low-interest credit line so you are not forced to use a credit card with high interest. Finally, when things return to normal, make it a top priority to replenish emergency funds and repay your loan.

 3. ACCOUNTS FOR INTERESTED INTEREST RATES
Do you know how much interest you pay for your loans? Are flat rates or varied? Make it a priority to find out. Interest rates vary much lower than fixed rates that can save you money. However, consider only a variable rate loan if you have the flexibility in the budget to absorb the increase in interest costs if the interest rate rises. Fixed rates may be better if the rate increase will cause you to experience financial difficulties or undue pressure.

4. PROACTIVE THINKING AND PAYMENT OF DEBT AS A PRIORITY.
Just because you have a 25 year mortgage does not mean you have to take 25 years to pay it off. In fact, almost all mortgages allow you to make extra payments, more than what’s required. Doing so can significantly reduce the amount of time it takes for you to pay off your mortgage and can save you significant interest. The same applies to almost all loans. If you want to be debt free, make it a priority scale. Set debt reduction goals in the same way you set retirement savings goals.

debt-consolidation 5. CONSOLIDATION WITH YOUR DEBT
One of the easiest ways to reduce your debt quickly is to consolidate everything to the lowest possible level. Moving all your debts to a low interest rate loan account will not only help you save on interest, it will make it easier for you to track how much debt you have. And, knowing how much total debt you have at any given time will make it easier for you to keep your debt freedom plan on track.

6. SPEAK WITH YOUR FINANCIAL PLAN ON THE DEBT WHICH CAN WORK FOR YOU
Lastly, do not be afraid to talk about debt. Debt management is an essential part of an overall financial plan that can help you create and implement a debt-free plan.

Most people want to get out of debt. The good news is that, by applying some of these simple strategies, you may be debt-free faster than you think.