3 Tips to Getting Debt Free

Debt has a way of sneaking up on us--a few charges to our credit cards, an auto loan, a Home Equity Loan. All of those little things can add up fast. But even the biggest debts can get paid off if you follow these three simple tips:

Get organized!

Before you can start tackling your debt, you'll need to know exactly where you stand. Gather up all your bills and account statements. Make a list of every debt, the current balance, and the current interest rate. Then organize them in the order you want to pay them off. Financially, it's smartest to pay off the debt with the highest interest rate first. However, many experts suggest starting with the lowest balance because it'll get paid off quickly. That way, you'll stay motivated to keep paying off your debt.

Start small!

Find the little savings in your everyday life--that fancy cup of coffee, lunch from the deli, the magazine from the newsstand. Cut back on these types of extras and you can save hundreds a month! Find other ways to save, too, such as negotiating for a lower price on big purchases, using coupons at the grocery store, or buying your fuel from the cheapest gas station. Add up all those little savings each month, and send them as an extra payment on the bill you decided to pay off first (keep sending the minimum to your other creditors, too). In no time at all you'll have the balance whittled down to zero!

Let it snowball!

Once you get one debt paid off, take that minimum payment--plus all the little savings you've accumulated--and add it to the minimum payment on the next debt on your list! You won't miss the money since you had been sending it to a creditor anyway. Keep this up and continue moving on to a new debt each time you pay one off.

Having hundreds--or even thousands--in debt may seem daunting. But it is possible to get those balances back down to "zero." Just follow these simple steps, and you'll be on your way to a debt free life!

Our Recommended Debt Consolidation Companies:

Helpful Tips:

1. Apply with more than one company to compare offers.
2. Study your options before committing to a debt program.
3. Cut out small luxuries to pay down debt at the beginning of your debt reduction program.

Debt consolidation companies vary in what types of consolidating solutions they offer. There are debt counseling companies, debt settlement and negotiation companies and debt management companies.

Debt Counseling - Debt counseling companies offer, usually, non-profit services to help you reduce the amount you owe on your debts. However this service may hurt your credit ranking. Talk to the company and find out if what they do will affect your credit ranking.

Debt settlement and negotiation - This is a process where a company will negotiate a lower payment or lower amount owed to the lender, on your behalf. Sometimes this can hurt your credit also. Debt settlement companies vary in their techniques. Before you choose a company, make sure you read through some reviews about that company before you start.

Debt Consolidation - Debt consolidation is where you take out a new loan in order to consolidate and pay off all existing debt. This usually lowers your overall payments and reduces the amount your paying every month. Not only does debt consolidation not hurt your credit, but it can actually help it.