Debt Reduction & Financial Empowerment

By simply reading this article, you have taken the first step to sorting out your debt. This is vital as so many people find it much easier to just ignore their spiralling debt, pretending it isn't a problem. In reality however, it's only getting worse.

The next step is to talk to the organisations you owe money to and let them know that you are having problems, the sooner this is done the better. With any luck, they should be able to set up some sort of specialised payment plan, such as lowering interest rates, or monthly payments; making the repayments more manageable.

If you have more than one debt, then you need to figure out which of your debts are 'priority debts'. Such debts take priority because not paying them will have serious consequences such as losing your goods and/or home, disconnecting power supplies and finally being sent to prison.

Probably the most important of these are any Mortgages or Secured Loans that you may have, which failing to pay would result in losing your home.

Further methods that can be taken to help reduce your debt include:

Transferring Credit Card Debt to a card with a low or 0% introductory rate
Check Credit Reference if you have been refused credit and you know there is no reason for it, it may turn out that there is an error on your credit record
Use Any Savings to pay off debt as the interest paid upon savings is generally far less than what is charged on borrowing, it makes sense to use any savings to clear debt

Although the journey out of debt can seem hopeless at best, it isn't impossible, no matter how far in debt you may be. An excellent example of this is the ongoing effort that one blogger is making to become financially independent.

At the start of this year, a 25 year old single mother from central Florida decided to take the first steps to taking hold of her finances. She set herself realistic financial goals, namely; to have her credit card paid off by the end of the year and to buy her first home early next year.

With this in mind she has set up a personal finance blog, where she has detailed amongst other things, all her spending habits and outgoings since the beginning of the year.

She has made numerous pro-active changes to her everyday life, some of which include; moving to a lower rent apartment; cutting utility usage; and contacting her loan company to switch to a lower APR. Such change will result in a saving of $3180, which will either be used to pay off her credit card debt of go towards savings.

By: Liam Gerken

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Along with finding a wealth of information regarding debt reduction, you can track the progress of the blogger mentioned above on her website at - www.dimples44r.blogspot.com