The credit crunch is not just about the willingness of
banks to lend each other money. It affects each and every
one of us. Over the last fifteen years we have seen an ever
increasing injection of money into the monetary systems of
all the major banks in the western world and with low
interest rates this has created an environment of a cheap
money supply.
We have all been encouraged to borrow money whether it is
for cheaper mortgages, zero rated credit cards, or bank
loans, all with the intentions of keep us spending and
therefore keeping the major economies running.
This has resulted in levels of personal debt never seen
before in every major industrial country in the world.
In the next two years the people of these major countries
will be fighting their biggest battles not on the streets
of Bagdad or the hills of Afghanistan. The biggest battles
will be on their home front, literally. Desperately
fighting from trench to trench trying to stem off the ever
increasing price rises of food and utility supplies and
millions of people will carry the scars from skirmishes
with bailiffs and debt recovery companies.
The major battle for the majority of average families in
this worldwide economy will be, not just stopping going
into debt, but managing their debt.
Debt is simply a fact of life for many people. While debt
can be an incredible burden, it doesn't have to be if
you're willing to work toward a debt-free life. There are
several simple tips you can follow to ensure that you pull
yourself out of debt - and stay out of debt.
First, face your problem head on. Some people tend to
panic, and understandably so, when it comes to debt and as
a result ignore the problem. Ignoring your debt isn't going
to make it go away nor is it going to help you: It's only
going to make problems worse.
Start by sitting down and making a list of all of your
debt, including the name of the person or company to whom
you owe money, the amount of money you owe, and your
monthly payments. Knowing how much you owe and to whom you
owe money will help you get a better handle of the
situation. If you are heavily in debt, you must prioritize
your debts to ensure that those with the most priority -
your mortgage, for example - are paid first.
The next step to working toward a debt free life is to set
a budget and stick to it. To set your budget, start by
listing all of your monthly expenses, including your
recurring bills and debt. Your monthly income should cover
all of your monthly expenses. After, and only after, you've
paid your essential bills should you use the money you have
left to pay down your remaining debt.
While you're in debt, you may have to cut back on some of
the luxuries and only pay for the necessities. For example,
rather than purchasing brand names at your local
supermarket, opt for the store brand. Eat in rather than
eating out. Read magazines at the library rather than
purchasing them. You'll save money that you can then use to
help pay down your debt. (Some experts even recommend
keeping a daily spending journal, so you can see where
you're wasting money.)
In addition, take a look at your current expenses,
including your home and car insurance, to determine if
you're getting the best rate out there. Most experts
recommend shopping around for new insurance at least once
every year to ensure that you're getting the best rates
possible.
If you don't have enough money to pay your monthly
payments, contact each of your creditors and talk to them.
You'll likely be surprised at how willing most creditors
are to work with customers; oftentimes, creditors will
negotiate a smaller monthly payment.
Finally, a word of caution: If you're in debt, you don't
want to go further into debt, so do not open any new credit
cards, initiate any new loans, or take on new debt of any
kind. In fact, cut up your credit cards, leaving only one
for an emergency. Remember, your goal is to pull out of
debt, and adding new debt will only hinder that process.
So as the storm clouds of recession gather on the horizon I
can only suggest you bunker down make your plan of recovery
and prepare to go into battle against the biggest enemy you
will ever have. The life and soul destroying Debt.
----------------------------------------------------
Barry Share is the Founder and editorial director of "The
New Lifestyle Programme" Where you can get your copy of the
amazing..."Design for your Success" a 7 step plan to
achieving wealth health and happiness
=> http://newlifestylepro.com/dfs-s.html
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