The hardest part is facing up to your debt. (Debt Help in General)

Member Name: herbie__53

Product:	Debt Help in General
Date:	02/02/09 (27 review reads)
Rating:

Advantages: Think of all that spare money when you've paid everything off!

Disadvantages: It will take work and sacrifices on your part.

Firstly let me give you some information about us. Me and my husband are 24, and between us have £20k of debt on credit cards and loans. Now I can account for where some of the debt came from, such as £2k for our wedding, £5k on my car, £3k on my husbands car, £1k for furnishing our first home, but I cannot account for the rest. I believe that we just got carried away with spending on credit cards. We wouldn't think twice about spending on the credit cards when we went into town, and more than once we would max out a card to its limit. My lightbulb moment was about 6 months ago, when we decided that in 2011 we would go out to Malaysia to live with my dad for two years. To do this, we need to be debt free. So, I did the first thing which anybody that wants to get out of debt should do - draw up a list of how much you owe to who. This was a bit scary as I only thought we owed about £20k, but it turned out we owed £26k! Eeek! I put all the numbers on to a spreadsheet, and have a column for each month where I deduct the payment made off each debt for that month and then show the remaining balance on that debt. At the bottom of each month I have a total that shows my total debt. By doing it this way you can see at a glance when all your debts will be paid off at the current repayment amounts. This can be inspiring, seeing that date when you will be debt-free! The next step to do is to draw up a budget for each month. List all your income, and EVERY item of expenditure. Be honest - put in those takeaways and cds. It may be shocking to see how much you frittle away each month. Cut out anything that's not necessary, and there's a easy way to deem whats "necessary" - to determine if it's a NEED or a WANT. You don't need a takeaway, you want one, so that has to go I'm afraid. That new cd you've got your eye on? Again, you don't need it. Can you borrow it from a friend? Or rent it from the library? If you really want to pay off your debt you have to be disciplined. Add up all the items from the past month or two that you have not strictly needed, and add this amount to your monthly payments on your debt spreadsheet. Now see how fast that debt could go down!
Cut up those credit cards, but keep one for an emergency. And NOT in your wallet! Leave it in a drawer at home, or give it to a family member for safe keeping who will only give it to you to use if the reason is justified. OR - freeze it in a block of ice in the freezer!
Look at every item of your expenditure: car expenditure, broadband, mobile, food shopping, and determine if you are getting it at the absolute best price possible. If not - switch!
It's a struggle, but it will be worth it. My debt free date is currently at July 2010. Roll on!

Summary: Its rewarding to know that you are doing something about it.