How To Manage Money: Eliminate Debt Step by Step Part 2

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money ladder In my last post I discussed 4 simple ways how to manage money and eliminate debt step by step. Each step suggested ways you can help eliminate your debt all together. Those first 4 steps were to:

Access your current financial situation – Know how much money you are spending and saving each month.

Analyze your spending habits – Go through your purchases and discover the ‘mistakes’ you tend to make when you spend your money.

Budget – If you want to have financial goals you need to plan them first.

Eliminate those ‘Red Flagged’ purchases – Limit or prevent any unnecessary purchases. If you don’t need something don’t buy it plain and simple.

It’s not always easy to get your spending habits under control if you have not followed specific guidelines before. One of the biggest challenges you will discover is how much of your lifestyle you may need to change. Unfortunately that change is crucial if you want to start saving for your future. Fortunately those first 4 steps will help with that change. You should also take these next 4 steps if you want to learn how to manage money and eliminate your debt step by step.

The Fifth Step: Find a low or no cost credit card.

You may have to search around to different companies but this is a very important step to take. The key to this is if you carry a balance or if you regularly pay it off each month. If you carry a balance that carries over you need to find a credit card with a low interest rate. It is extremely difficult to pay a balance if you are paying 18% interest or more. That money adds up quickly. If you are lucky enough to be able to make your payments, use a credit card with low or no fees. The best solution is to eliminate your credit card altogether and only use it for emergencies.

The Sixth Step: Consolidate your debts.

This is one step you need to be careful with. The plus side is that debt consolidation offers the opportunity to lower your monthly payments, save on interest and can even help you get out of debt faster. But there are downsides that must be taken into consideration such as not solving the root of your debt problem and stopping the tendencies that started the debt to begin with. You may end up paying more in the long run with debt consolidation if you aren’t careful.

Try using this free calculator that can show you how to manage money through debt consolidation.

http://moneycentral.msn.com/personal-finance/calculators/Consolidate_Your_Debt_Payment_calculator/home.aspx

The Seventh Step: Seek financial advice.

This is simple and clear. You aren’t going to be able to know everything you need to about debt and how to eliminate it. These steps will help but it is still wise to seek face to face advice from a professional.

The Eighth Step: Fix your credit.

Having bad credit is, well, not good. There are many major purchases you are going to make in your lifetime and you need a good credit rating to do. You can check your credit at your financial institution or even do it online with a company like Equifax. The more quickly you repair your credit the better.

Is there a way to manage my money and eliminate debt step by step? I truly believe that if you follow these eight steps you will have the right tools to eliminate. Good luck and I look forward to any success stories that you may have!

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