Helpful Ways to Get Me Out of Debt

Do you feel like you're the only person in the world who is buried under enormous debt? Well, you are not. The total American household debt in 2008 was $13.8 trillion. When Will Shakespeare made the comment: ""Neither a borrower nor a lender be; For loan oft loses both itself and friend", he pretty much hit the nail on the head!

2009 is starting out even worse. There are more and more foreclosures each and every day. Even though we keep hearing things will be getting better, it's not doing any of us much good right now.

Don't get me wrong. All debt is not necessarily bad. Most of us would never be able to buy a house and take advantage of the tax deductions that go along with being a home owner if we didn't get a loan to do so. On the other hand, too many of us took out loans for houses we really couldn't afford. I myself was offered a loan for a house that seemed really affordable for about 5 years. The payments are now $500 more than they were in the beginning, yet my income hasn't gone up at all.

So, what do you do when you reach that point that you hate to answer the phone, you are constantly getting hit with late fees and each month your debt gets higher and higher. When you get late fees, many times you're incurring more debt even if you are making a monthly payment.

The good news is that it really is possible to get out of debt. There IS light at the end of the tunnel. But, you have to make some big sacrifices to even crawl into that tunnel. You just can't keep following the same old plan and expect things to get better.

One thing that hurts a lot of people is they don't want to face up to the truth. The best way to get started is to find out exactly where you stand. Get together all your bills and make a list of everything involved in your necessary living expenses.

By the way, necessary doesn't include entertainment items like satellite tv, movies or restaurant expenses. We are talking food, electricity, heat fuel costs and other basic necessities.

Don't worry....this will not last forever and eventually you will be able to have some of those luxury items again.

Look at it this way. You are probably getting hit with late fees from the credit card companies every month AND they are probably charging 28% or even more for your purchases. That means everything you spend right now is costing you 28-30% more than it should. Once this is paid off, you will be paying normal charges and your money will go a lot further.

Now, you have already listed your household costs. Now you need to write down every single debt that you owe. And then write down your income for each month.

Subtract your necessary expenses from your income. Be honest! The money that is left over will be the money you have to pay down debt.

Let's say you take in $2000 a month. You have pared down your living expenses to the bare minimum and made the commitment to give up luxury spending until you have paid down your debt to the point where you take in enough money every month to pay your expenses, put money in savings, and make payments towards your debt.

Now, what happens if you need more money to pay your debt than you have left over after paying you necessities? Well, you need to renegotiate your debt. Most debtors will be happy to work with you if you are just honest and up front with them. Figure out what you can afford and call them to work out an agreement with them. Tell them what you can afford to pay and in most cases they will accept it.

You will probably be amazed at how easy it is to work with your debtors. And just think of how much better you will feel, knowing that you have a plan that works within your income range. It will not be long before you will experience life as you want it to be, with self respect and a positive outlook each day.