Do you need some debt relief? You have lots of company in this situation. Here are some tips on how to help yourself.
1 - Stop Using Credit Cards
If you haven't done this one, then this is where to start. Put the credit cards and line-of-credit checks under lock and key, and operate as if you don't have them at all. Work out how to bring in more income and pay cash instead. This is the one action that jump-starts your program to get out of debt. This step is critical to your program if you truly want to be debt free.
2 - Never Commit to Spending More Than Your Company's Income
Using credit to purchase something commits your company's future income to the credit card company. Then you experience economic slavery. Take a hard look at whether the item you are about to buy is really something that will increase your company's income, or whether it is just something you want at the moment. If you really need it to produce more income, figure out how to make the cash to pay for it over a short period of time, rather than buying on credit. Figure out ways to increase the income your company is making and use the cash to pay off the debt while also paying operating expenses.
3 - Always Pay More than the Minimum Payment Required
To be really effective, your program should include using 10% to 15% of the business' weekly income to pay against the debt. Set a goal to pay at least 3 to 5 times the minimum required payment on each credit card and line of credit. Set aside some of the payment money each week before the statements arrive at your office. It's much easier to stash away smaller amounts over 4 weeks than to try to come up with a big chunk in one week.
Paying more on the highest interest rate card is an effective debt reduction tool you should use in your program. Another effective tactic is to pay off the cards with low balances as fast as possible. The money you were paying on those low balance cards becomes available to pay off the highest interest rate cards.
4 - Never Pay Late or Spend Over Your Limit
Do not destroy your debt reduction strategy by getting hit with late payment or over-limit fees of $25 to $39 on which you'll pay interest. In addition, if your payment arrives more than 30 days late, your credit record carries that big black mark against you for 7 years - a whopper of a penalty.
In a news report, a Vice President of a U.S. bank recently said that over 24 Billion dollars was paid in the past year on credit cards for over-limit fees, late payment charges and interest. The credit company may fuss at you for paying late or going over your card limit, but they really don't mind when your mistake makes them billions of dollars every year.
5 - Cut Back on Expenses
An effective program to reduce debt requires as much extra cash as possible and as fast as possible. Examine how your company's income is being used and reduce all unnecessary expenses that do not contribute to the production of more income. Before you spend, figure out how much money each and every purchase is going to return to your business.
TIP: Continue promoting your your company and its products to everyone - don't cut back on that activity. Just make sure your promotional spending is bringing more money back in than what was spent.
Managing a company's income correctly to make sure it survives takes more than a program to reduce debt, but this is a really good place to start. There are other steps that can be taken to increase the business' income, pay bills on time, have cash reserves for emergencies, increase profits and pay yourself more money. You want that, right?
Article Source: http://www.orbitaloc.com/
Sandra Simmons, President of Money Management Solutions, has years of experience helping business owners and individuals manage their money to become debt free. To learn more about the Money Management Software she created, watch the FREE 5-minute demo video on her website at www.MoneyMgmtSolutions.com
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Article Title: A Do-It-Yourself Debt Reduction Program
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