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Debt Reduction Will Financially Set You Free.

Debt reduction is the key to mastering finances and breaking free from creditors. As Americans, we have been conditioned to buy, buy, buy. However, this brainwashing has left us with a nation known for its consumer debt. It has been estimated that U.S. consumer debt has skyrocketed to more than $2 trillion, or an average of $20,000 per American.

Debt reduction is a sure-fire way to eventually eliminate debts and achieve your financial goals. However, you must take steps to adjust spending habits and develop a plan to pay off outstanding debts.

There are numerous ways to reduce debt. The Internet is an excellent resource for locating debt reduction tips and professional resources. Credit counseling, debt consolidation, debt settlement and debt management programs are available to help debtors regain control over finances.

The first step to consolidate debt reduction involves taking a serious look at your finances. Experts suggest creating a spreadsheet to outline income and expenses. This can be done using a piece of paper, software program such as Excel, or financial budgeting program. A spreadsheet will help you spot unnecessary spending and determine which debts are costing the most money.

In order to reduce debts, you must first stop generating new debts. This means no more use of credit cards or obtaining additional loans. In today's recessed economy many Americans are using their credit cards to pay for daily living expenses. They charge their gasoline purchases, groceries, haircuts, manicures, clothing, and even pay their utility bills. Doing this increases their debt because they are paying interest on everything they charge.

When developing a debt reduction plan, it is important to realize it took time to accrue all this debt and it will take time to pay it off. Unfortunately, there is no quick fix for debt reduction unless you win the lottery or inherit enough money to pay off all your debts.

If you are unable to create a workable debt reduction plan, you might benefit from credit counseling. Credit counselors can review your finances and shed light on problem areas. Not only do credit counselors provide education and counseling, they can also negotiate with creditors to reduce interest and eliminate late fees. In some cases, credit counselors can convince creditors to reduce outstanding balances.

Other debt reduction programs include debt consolidation, debt management and debt settlement. These types of services are generally handled by professional debt consultants or attorneys. There is generally a fee involved, which can amount to as much as 15-percent of the total amount of debt owed. Therefore, careful consideration should be given before embarking on these types of debt reduction programs.

Debt reduction can lead you to financial freedom. It takes time and patience, but you can break free from debt if you are willing to become educated about the various options available. We invite you to learn more about debt reduction programs by visiting Simon Volkov's blog article database and knowledge center.

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Published on September 12, 2008 at 08:39 AM

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