Wednesday, January 24, 2018

3 Steps To Beat Your Debts And Stay Happy In 2018

How's it going everyone!  Today I have a fantastic guest post by a blogger that will surely have you conquering your debts and living happy in 2018.  Enjoy!

Tips for Improving Your Credit: Your Amount of Debt

Our lives are full of problems.  Some can't sleep well at night, some can't find their soulmate, some can't seem to lose weight, some can't accomplish their dreams, some can't get a job, some don't like their job, and etc., etc.

But owing money to others or having debt is probably the biggest headache you can have!  It's a liability, pressure, call it whatever you want.

This year, break the debt cycle and know how to manage your debt and live happily (ever after)!  But before you plan to manage your debts, you must know how to manage your expenses.  So you need to follow these three steps that I'm about to show you.

Step 1:
Try to lower your costs and revise your past mistakes.  As 2018 progresses, watch out for the mistakes you made in past years and analyze why you have amassed so much debt.  Try remembering whether or not you made any costly decisions or expensive purchases.  If you can recall what type of payment method you used for those purchases, even better!  Did you use credit, debit, or cash?  If it was a credit card, then buddy, that was a big mistake.

Tips to lower costs,

1.  Whenever you buy anything, think of what good use the item will be.  If you can't find any beneficial reason for buying the item, then drop the idea of buying it!

2.  Avoid using credit cards for random purchases at all costs!  Try using them only for emergency purposes.  I would say that even for big purchases, make a couple of month's planning.  Gather the cash and use it to pay for that specific purchase.  With credit cards, you pay twice.  Once today, and once tomorrow.  Today you pay the full price of the object, and tomorrow you pay for all of the interest!

3.  If you're planning to purchase insurance this year, make sure you don't overspend.  Buy only the coverage you need, e.g., starting off with Life, Home, and Auto policies.  Don't go overboard getting both a Term AND Whole life insurance.

4.  Avoid making late payments on your credit cards!  The more you delay, the more you'll be paying for interest and penalties, and the likelier your chance of ultimately defaulting.

Actually, this year you should make a resolution to cutdown on living above your means.  Change your lifestyle to the dedication of making extra payments on your debt and on saving if possible.  Set small goals and work on them one at a time.

Step 2:
Build savings and earn extra.  To be clear, if you follow the above mentioned points, then you should have no problem making extra payments on your debt and saving a lot of money.  Whenever an opportunity presents itself for saving or making extra cash, grab it!

1.  If your income from your job isn't cutting it, get a side gig.

2.  Every month, try hard to save at least 20% of your income.  Without a healthy emergency fund, one unexpected expense will again have you falling into the debt trap.

3.  If you have two breadwinners in your family, say for example you and your spouse, combine both of your finances so that one income pays for the day-to-day expenses, while the other is used to build savings or to indulge in things from time to time.

4.  There are many ways you can invest your money to get a high future return.  Always have your investor cap on so you can increase your wealth.

After step 1 and step 2, you're now ready to ward off those evil debts!

Step 3:
Tips to manage your debts.  First you need to know how to be debt free.  No matter how hard you try, if you don't have good money habits, you just can't clear your debts.  Additional tips include:

1.  Don't rely on your credit cards for ALL purchases.

2.  Avoid luxury expenses.

3.  Once in a while use public transportation to cut back on gas.

4.  Save energy, like electricity, for instance.

5.  Don't get in fights with your spouse over debt.  Handle the situation calmly.  Go see a financial therapist or counselor if needed.

6.  If you have a lot of consumer debt, like credit card, personal or payday loans, consider debt settlement.  With debt settlement, you will be able to lower your payments significantly by negotiating with your creditors.  Use a settlement company if the process is too hard for you.

7.  Debt consolidation is a viable option.  Debt consolidation companies will help you rearrange your payment structure so that it better suits you.

8.  For secured loans like mortgage and auto loans, try out loan refinancing and/or modification.  Talk with your lender to see if any of these options are possible.

9.  If you have several loans to tackle at one time, try the debt avalanche method for making payments.  Target the debt amount with the highest interest rate and make extra payments on this account while making the minimum required payment on the rest.  This way you'll pay less interest over time.

Well, that was all.  Make sure you come out of 2018 debt free!  Follow all the steps I've discussed and you'll see great results, that's guaranteed!  Good luck!

Andy Masaki is a blogger at and financial writer associated with the Oak View Law Group.  He is a debt expert and member of several online forums where he shares his advice as well as tips to lead a financially independent life.  

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