5 Do-It-Yourself Debt Relief Strategies That Really Work

If you're dealing with debt you have 3 options. First, you can get help from a professional debt relief company. Good option, if you can find a good company that will give you good service. Second, you can hope you win the lottery or get a big inheritance from a rich uncle you never knew about.
You could certainly become very rich if either one of these comes true, but you are much more likely to go to your grave waiting. Your third option is to do it yourself.

By getting yourself out of debt you will save yourself some money, you won't have to worry about getting ripped off by some unethical debt relief company, and you will maintain complete control over your finances.

Can you really get yourself out of debt? Definitely! You just need to make a commitment, write down your goals and come up with a plan, and learn the best strategies for paying off your credit card bills. You don't need any special skills. You don't need to be a financial expert. You just need to know how to do it correctly.

So, if you're ready to get started, then here are 5 do-it-yourself debt relief strategies that really work:

1) Create your own debt relief plan

There are several ways to structure your payments to get out of debt, with the simplest and most effective being the "debt snowball method." You can find spreadsheets or software to help you with this, but all you need is a piece of paper and you can easily create your own debt snowball plan.

Write a list of all your debts, in order from smallest to largest. For the smallest debt, pay the minimum plus whatever extra you can afford - £25, £50, £100, or more - every payment. Once this is paid off, add the entire amount you had been paying to the next smallest debt, so your payments gradually get bigger and bigger, like a snowball! Starting with the smallest amount means you'll get to see progress quicker, and hopefully will be motivated to keep going until you are debt free!

2) Consolidate your debts

If you own a home you can consider taking out a home equity loan to consolidate your debts into a single payment with a lower interest rate. This can be an effective way to pay off your debts faster while saving lots in interest.
However, you need to think long and hard before you use this option - if for any reason you can't make the payments, you risk losing your home to foreclosure. And you'll lose the equity (when the house is worth more than you owe, that's called equity) you've built in your home. Which may hurt you if you decide to sell especially if the house value goes down, or if you ever want to take out a loan to male home improvements.

So, while this can be a very good do-it-yourself debt relief strategy, there are some risks, so think about all the possible consequences.

3) Borrowing money

If you have friends or relatives that enough some extra money they can lend you, this can be very helpful.

You don't have to go through the lending process like you would when getting a loan from a bank, and you don't have to pay any fees. If you don't owe too much to your creditors, this can work out very well. But, make certain you can pay back the money! Otherwise you can absolutely ruin your relationships.

If you think money problems are stressful, wait until you see how your friends and family treat you if you can't pay them back!

4) Credit card balance transfers

Using credit cards to pay off credit cards is certainly not the best strategy. But it can work if you do it correctly.

First, you either need to have available credit on an existing card, or you need to search online or check your mailbox for offers from new cards. If you currently have high interest rates, the balance transfer offers are usually very tempting. But keep in mind that they don't last forever, so in 6 or 12 months you'll need to do this again when your low rates end.

Also keep in mind that your fees will usually be pretty high, so unless you can lock in a low rate for at least 6 months, preferably longer, you won't save much.
And finally, if you do apply for a new card, make sure you DO NOT use the extra credit. Otherwise you'll be building up more debt while you are paying down your current debt, and essentially be digging a bigger hole for yourself!

5) A little here and a little there

Alone this won't get you out of debt. But use it in combination with one or more of the strategies above and you'll get out of debt that much quicker. What do I mean by "a little here and a little there?" It means doing a whole bunch of little things that together add up to savings for you!

Cut out extra expenses. Shop around and compare before you buy. Use coupons. Stop eating out for lunch or dinner every day. Stop buying extra clothes you don't really need. Buy used items from Craigslist or consignment shops. Reduce your cable TV or cell phone service plans. Go out and get a part-time job or start a part-time business. Get the idea? There are lots of ways to save money if you really work at it and get creative! Individually they won't do much. But together you can save several hundred dollars each month!

Which strategy is right for you? Well, you'll need to look at your situation very carefully. And decide which ones sound the best for you. Don't feel like you are limited to just one. And don't feel like you must use all 5. But if you use a few of them, and you are willing to stick with them even when you don't want to, your chances are good of getting yourself out of debt for good!

Kris Bickell shares personal finance tips on www.Debt-Tips.com. Learn helpful strategies for getting out of debt, fixing your credit problems, and other money saving tips so you can become debt free.


This article was originally created by Kris Bickell, and was promoted to our main site because it provides great value and interest to our community. The author’s views are entirely his or her own and may not reflect the views of Iva123.co.uk.

Post a comment