How to Get Rid of Debt

There are many reasons that people get into debt. They may start out with a reasonable debt load from basic necessities such as a home mortgage and car loan, but that can quickly multiply and run out of control according to the individual's or family's spending habits. A serious illness, loss of job by one partner, or other catastrophic events, can lead to extra expenses, more loans, or what's called "credit card shuffling": the use a card to pay other debts such as utilities.

The first thing anyone should do, is to sit down and make out lists of your debts, how much the monthly payments are, and how much income you average per month. Don't count extra checks that fall in a month where there are five paydays. After totaling your loans and credit cards, then adding your necessary expenses such as rent, utilities, insurance, and food, what do you have left over?

If it's nothing, or very little, then you need to look at restructuring your debt load. Many companies will offer you consolidation loans, but in the long run, these can add up to more than you owe now, because you'll be paying the debt off over a longer period, thus accruing more interest charges.

You may want to first look at what expenses can be cut on your own. Brown bagging lunches, taking bottles of juice or pop instead of buying from vending machines or stopping at a deli, can cut a surprising amount of money from your weekly expenses. It's possible that with a little creative accounting, you can pare them down to where the belt is tightened, but not choking you.

If not, check with your local credit counseling service. They can give you advice on such things as budgeting, and perhaps a debt consolidation loan from your bank. These are often lower rates then you'll get through companies on the Internet. Credit card interest rates are significantly higher than a financial institution's. With restructuring, it may take some of the immediate pressure off your family, reducing stress, and giving you breathing room to get back on your feet.