News - Make headway on the debt highway - Make headway on the debt highway

If you dread the onslaught of post-holiday bills; time to take action. There are ways to effectively pay down your debt, if you dedicate yourself to using credit responsibly and stick to a sensible plan. The Better Business Bureau of Minnesota offers the following to help improve your financial status: Set up a budget to guide your spending. The budget should detail your monthly income, as well as monthly expenses. To do this effectively, record all expenses over several weeks. Look at the bottom-line totals for your income and your expenses. Now outline a spending plan that insures your income will exceed your expenses each month. Don’t go deeper in debt! Put your credit cards away and make a concerted effort to refrain from borrowing money. Pay cash or use a debit card. Spend a little less each day. The possibilities are endless: forgo the daily coffee; take public transportation; use coupons; eat more home-cooked meals; cancel your cable TV, etc. Use the freed-up money to build an emergency savings account for unexpected expenses. Prioritize debt repayments. Pull out your credit card statements and review the outstanding balances and interest rates. Tackle high-interest rate balances first, by paying double or triple the minimum payment each month until that card balance is paid off; then direct that freed-up money toward the next highest rate balance. You may qualify to transfer debt to a card that carries a low interest rate. Contact your card company to discuss options, and carefully read the fine print on transfer offers. Ask your creditors to reduce interest rates. Contact your creditors to request an interest rate reduction or a new payment schedule. Discuss the challenges you face trying to reduce your debts and assure them you’d like to remain a loyal customer. Make extra payments, whenever possible. When you find yourself with unexpected cash (a gift, a raise, a tax refund), use that money to make extra or larger payments on your high-interest loans. If you don’t see any progress after a few months, seek professional guidance from a non-profit credit counseling agency. Certified credit counselors can provide a no-obligation evaluation of your financial situation. Check with the Better Business Bureau before selecting an agency. For more info visit www.bbb.org.