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Get Out of Debt and Start Paying Off the People You Owe.

Most people want to get out of debt but struggle with making ends meet, let alone paying off additional debts. Millions of Americans are financially strapped. They are in fear of receiving a foreclosure notice from the bank. They are afraid they will lose their job. The wonder if they will be have to choose between putting food on the table, purchasing gas for their car or purchasing a much-needed prescription medication.

If you are attempting to get out of debt because money is stretched so tight you can barely squeeze out an extra penny, it is time to take a long, hard look at your finances. Unless you are living at poverty level, chances are you actually have more money than you realize. Millions of Americans spend thousands of dollars each year on unnecessary items they believe they simply must have. However, if you are drowning in debts, it's time to engage in some soul searching and discover what is truly important to you.

There are a variety of options to help you get out of debt. A few of the more common debt solutions include budgeting, credit counseling, debt consolidation, debt management, debt settlement and bankruptcy. Our comprehensive article library contains detailed information on each of these options. For now, let's take a look at one of the simplest ways to regain control over your finances.

Budgeting is by far the most effective and economical way to get out of debt. The problem is most people have no idea how to manage their money. If they did, they wouldn't be spending time searching for debt solutions.

All that is required to create a budget is a piece of paper and a pencil. You might also need a calculator. Draw a line down the center of the paper. On one side list all sources of monthly income. On the other side list all expenses. Now, this can be the tricky part because most people don't have full disclosure of their expenses.

While we know how much our mortgage or rent payment is, the approximate costs of utilities, child care expenses and insurance premiums, most of us don't have a clue where the rest of our money goes.

Believe it or not, I had a friend who completely eliminated $22,000 in debts in less than two years. He quit smoking, drinking alcohol and going out to clubs and restaurants. Carl always complained about never having enough "month at the end of the money". His credit cards were maxed out because he was the type who had to impress others and pay for dinner and drinks.

Carl earned a decent income and could have doubled or tripled his money through smart investments. Instead, he blew it on entertainment and unhealthy habits. His unhealthy habits cost him his high-paying job and within a matter of months, Carl was facing foreclosure.

One night he discovered Dave Ramsey's website and was intrigued by his get out of debt message. Carl spent the next few days devouring Ramsey's information. He sat down and calculated how much money he was spending on cigarettes, alcohol and entertainment. His investment in "fine" living was a whopping $18,000 a year.

Since most of those expenses were charged on his credit cards, Carl was paying hundreds of dollars in interest. He followed Ramsey's advice and cut up his cards, created a get out of debt plan and put it into action.

Carl's advice to others is to create a plan you can live with. He allowed himself the luxury of dining out once a week. However, instead of paying for his friends' tab, he only paid for his meal. His friends followed Carl's plan and reduced their debt load as well.

Debt is not your friend. Interest alone can add up to thousands of wasted dollars. Silly spending can rob you of your future. In today's recessed economy it is more important than ever to take control of your finances. Invest in your future by taking time now to learn the various resources available to help you get out of debt and stay out of debt!

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Published on October 31, 2008 at 02:03 AM

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