Initiate a credit card debt reduction strategy by adopting a strict budget plan.
No one likes to hear the budget word - because we associate it with PAIN. However, the budget is actually a very powerful and positive tool that should be more accurately associated with the word FREEDOM.
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"Money is better than poverty, if only for financial reasons."
- Woody Allen |
Despite the hooplah on television commercials, Chase does NOT equate to freedom.
It is of paramount importance to set budgets for reducing your credit card debts in order to attain financial freedom. Budgeting is a skill that will allow you to overcome your debt burden, improve your finances and let you regain control of your financial life.
Budgeting, as a money management tool, can enable you to save anywhere from five to twenty-five percent in the very first year alone.
Budgeting helps to make extra cash available after meeting necessary monthly obligations. This extra cash can then be applied towards your credit card debt reduction plan, a key step towards eliminating those high priced, peace destroying, stress building credit cards.
Imagine life with no credit card debt. Visualize yourself with extra income at the end of each month. How much better would you sleep at night? Living debt free is a realistic goal for anyone willing to plan for their future responsibly.
It is very helpful if you can enlist the support and guidance of a counselor to help you create an achievable budget. However, you may want to go about this exercise on your own. If so, the Internet can be a great resource to get you started.
While creating a budget on your own, it is essential for you to do some serious introspection in order to determine what is important to you and what personal goals you want to achieve as an individual and as a family unit.
This would require taking into consideration your long term plans. Identify the important aspects of life that can be impacted by finances. The result of your research should inspire you to create a balanced budget plan for your credit card debt reduction plan.
Debt, though undesirable, is nothing to be ashamed of. In our society today, going into debt at a very early age is almost considered a right of passage.
The difficult part comes when you realize that you are no longer in control of your debt, debt is now controlling you. This is where credit card debt reduction becomes a necessity.
Debt can also be accumulated as the result of a crisis like illness, job loss or even a natural disaster. Living your life on a solid budget plan allows you to more easily cope with these emergencies when they do arise.
So take a close look at your personal finances to prepare your cash flow budget i.e. monthly cash inflow and outflow.
Begin with all sources of income, including salary, bonus, interest, dividends, social security and all other sources of taxable and non-taxable income to get your monthly cash inflow.
Outflow would include car expenses like fuel, maintenance, loan repayments, repairs and insurance etc; home expenses for utility payments, repair, cleaning maintenance, rent/mortgage payments; other expenses on clothing, baby food and toys, dining out, groceries, gifts, health and insurance payments, etc.
The ultimate purpose of your budget is to determine how much cash is left over each month. Until you have eliminated all your credit card debt, you need to apply that leftover cash to your debt.
Sooner than you might think, you'll be living a debt free lifestyle.
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"Money is a good servant but a bad master."
- Francis Bacon |
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Debt is NOT your friend. It's not a wonderful "tool" for building wealth. That's a myth.
