Total debt elimination sounds too good to be true! We are actually talking about financial independence or complete freedom to do what you want with your money! Yet, you are the agent that reduces debt, not some wonder program that can wipe it away. There is no such thing. The right course of action is to reduce the unnecessary expenses, mange the budget wisely and start make savings. Do not put your hopes in the money from retirement plans or from life insurance policies because this can be very tricky!
Debt reduction should be maximal during your active work years, as you should no longer be indebted when you reach retirement age. The issue is that the retirement plan may not provide you with enough money to cover your expenses and you may end up penniless when you most need it. Create a budget worksheet and see which of your expenses are justified by needs and which aren’t. Then you will realize that total debt elimination strategies require serious commitment and a great deal of involvement. You won’t be able to enjoy a debt free life if you have a gambling problem or if you have a shopping addiction.
A total debt elimination plan has to rely on the family income. Yet, lots of unpredictable things can happen in the context of the world financial crisis. What if you had to face unemployment? How would you handle debt then? This is a very legitimate question that you need to pay great attention too. In case you decide to pay just the minimum amount for the credit card debt, it will take very long to make the repayment. It’s all in the interest of credit companies to keep millions of people like you tied to them.
For total debt elimination you have to use credit card carefully, and give up the concept of buying now and paying later. Then, do not take any credit card that is being offered to you before inquiring about the interest rate and the fees. The credit card should be chosen based on your borrowing habits. In fact, you could give up any borrowing habits that you may have. Total debt elimination takes great resilience, lots of effort and good management skills. Moreover, the consumerist trend is all the stronger and you have to resist it as well as you can. Don’t be afraid to work against your habits: you can do it!
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