Smart Tips to be Debt Free in 2010

A lot of folks are carrying large amounts of debt nowadays. The global economy is now in recession, and this does not look like it will be changing in 2010. There are many methods smart people use to be debt free.

The Worst Debt

The kind of debt that the average person carries is credit card debt and it is probably the most damaging. The interest rates and hidden fees are a real crippler. These cards can be flipped out on a whim, and it is very easy for this debt to stack up. A $20.00 meal can turn into a $60.00 debt before you know it. You could be paying for that dinner for the next year and a half if you are not careful.

Credit Card Debt Free

Dig up all those cards and figure out exactly what the damage is. Make note of the name on the card and what is owed. Pin point the due date and what the smallest dollar amount that you can send in is. Sort out the notes starting with the smallest amount owed. Only send in the payments with the least allowed on all the rest of your credit cards. Double, triple or completely pay off the card with the smallest amount owed. Do this until the balance is paid off. Then start with the next card always starting with the card with the smallest amount. In a short time you will begin to see a light at the end of the tunnel.

Put It Away

In conjunction with the above add a monthly amount that you can put away every month call it your rainy day fund. Put a small amount away daily to add to the monthly fund. No matter how small the amount is continue doing this. Once you have a decent amount put it someplace where it is hard for you to get a hold of. Each individual knows what this mean for them. It maybe a safe deposit box, a shoe box or even a savings account. One of the ways to avoid debt is to control impulse spending and having money put away for time when something unpredictable comes about. You will keep putting money away like this until you have a ninety day reserve. This should be an amount that could allow you to go without income for ninety days.

Controlling Spending

Keep in mind a large part of staying out of debt is spending within your means, which is controlling what you spend. This is a lot easier to control then your income.