Well, I have read a lot on forums on moneymaking and such during the weekend, and what really surprised me was the amount of people that posted there, that they needed help getting out of debt.
This got me thinking on how things used to be for me too, and there is a simple sequence that needs following.
The first and most important thing to do is to cut off your recurring credit supply.
This means, DESTROY YOUR CREDIT CARD! To fully understand this I first have to go into how credit cards work.
First you need to see why a credit card is so much worse than a personal loan.
The major difference between the two is that you cannot go and lend the money you have already paid in on your personal loan, again.
You can however do this on a credit card, and most probably will.
Ask yourself.
Who goes into debt with a credit card? Right, someone who didn't have enough money of his own to do what needed to be done.
So, this brings us to next month.
Next month you will need even more money because you need to repay the debt on your credit card.
This will however mean that you will have to take money on the card again before the end of the month to make up for the money you had to pay into the card, out of your household budget.
In the end, you will just gradually go into debt more and more, until the card is maxed out.
Now what? This is the worst place to be.
Now you end up putting a couple of bucks into the card, wait a few days, and go and draw the last bit of money that is left over, after the interest was deducted.
Sound familiar? Do you see that you cannot get out of debt here? Next mistake.
Now you go and take out a loan somewhere to pay for all the debt on the card.
This in itself is not such a bad idea, if the repayments are lower, and you cannot get more money on the loan.
Just don't get that second credit card to pay for the first.
The mistake however is in not closing the credit account.
You tell yourself that you will be more responsible, but, YOU WON'T.
Soon you will have that loan and the credit card to pay for, and things will be worse than ever.
So, consolidate your debt.
CLOSE all other accounts, and don't get new ones until the consolidated debt has been completely paid off.
Then start to save the payment that you will by now be so used to have paid on your debt.
Soon you will be able to look back on this nightmare, and think: "Why didn't I do this sooner.
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