Advertising

5 Tips for Getting Out of Debt (and Why)

5 Tips for Getting Out of Debt (and Why)
Advertising

When young people are first starting out in life, either as college students or young workers, debt looks like an easy solution to the shortage of money that seems to go with this period of life. It’s only a temporary fix, however, and will set a person back in the long run. Suze Orman, in The Courage to Be Rich, points out the outrageous amount of money that is paid on interest over the years with credit cards and other debts. She and other financial experts offer some tips for getting out from under.


1. Know about your credit cards. When you get the bill, look it over until you find the APR (annual percentage rate), which is the interest rate. Credit cards sometimes list other percentages and fees, but the APR is what will get you in the end. List your cards from highest to lowest APR. For instance, put that 27% interest card first, and the 0% cards last.

Advertising

2. Work from the top down. Pay as much extra as possible on that top card each month. Make minimum payments on the others. When that highest card is paid off, start the process with the next card on the list. Carry out this procedure until all the cards are paid off.

3. Round up. For speeding up the time it takes to pay off your mortgage, simply add a few dollars each month. Those dollars are applying to the principal, and even a few dollars a month can trim years off your debt. One idea is to round the amount up to the nearest ten.

Advertising

4. Emergencies? Experts disagree about the wisdom of keeping one low interest card on hand for emergencies. Frankly I think it makes some sense, but Dave Ramsey, author of The Total Money Makeover: A Proven Plan for Financial Fitness, says No. He says you should perform “plastic surgery” on those cards and cut them up. The bottom line is how you define an “emergency.” If it’s seeing a great deal on something you’ve been wanting, like a new guitar, maybe, but you don’t have enough money to cover it right now . . . well, that’s not really an emergency!

5. Keep it empty. If you do keep one card on hand for convenience or whatever, the best policy is to always pay it completely every month. Otherwise you are actually living beyond your means. Orman describes that lifestyle as living a lie. It’s been said that many people “spend money they don’t have on things they don’t need to impress people they don’t like.” Think about that statement and see if it applies in your own situation.

Advertising

An old classic success book is Success Through a Positive Mental Attitude by Napoleon Hill and W. Clement Stone. These authors listed seventeen principles of success, of which one was what they called “O.P.M.” This acronym refers to “other people’s money.” They advised borrowing money to invest in one’s own business efforts, and then thinking positively so that money would grow. It’s an interesting idea. What do you think?

References:

Advertising

Ramsey, Dave. The Total Money Makeover: A Proven Plan for Financial Fitness

Orman, Suze. The Courage to Be Rich: Creating a Life of Material and Spiritual Abundance.

Advertising

Hill, Napoleon and Stone, W. Clement. Success Through a Positive Mental Attitude

Barbara Wood is a writer and educator living with her family in the Missouri Ozarks.

More by this author

9 Top Secrets of Naturally Born Organizers Empathic Listening is for Everyone’s Good Deep Breathing: A Great Health Trick What Kind of Paranoid Are You? 5 Tips for Getting Out of Debt (and Why)

Trending in Lifehack

1 Lifehack Reviews: 50 Best Life Hacks for Your Life 2 Best Life Hack Sites – 100 Most Useful Websites on The Internet 3 80 How-To Sites Worth Bookmarking 4 20 Unusual Uses for Coca-Cola That You’ve Never Considered 5 A Review of the Book “The Art of Learning”

Read Next

Advertising
Advertising

Last Updated on July 12, 2021

Lifehack Reviews: 50 Best Life Hacks for Your Life

Lifehack Reviews: 50 Best Life Hacks for Your Life
Advertising

Do you want to be as productive as many of us, but missed a lot of actions at lifehack.org during the year? We’ve selected the best 50 life hacks, based on their popularity and contents in different categories. Invest your time – read them. Bookmark this page and mark reading them as one of your new year resolutions.

Communication, Writing, Studying

  1. My Best Presentation Tricks
  2. The Business Card Game
  3. Persuasive Writing for Students, Webmasters, Bloggers, and Everyone Else
  4. 7 tips of handling your Emails without feeling overwhelmed
  5. Writing as a Form of Self Healing
  6. Advice for students: Writing by hand
  7. Yes, But Do People Like You?
  8. Writing – Just do it!
  9. A good place to study
  10. Blog your way through Writer’s Block
  11. 14 Tips for Communicating Ideas

Productivity, Creativity, Motivation

  1. 9 Top Secrets of Naturally Born Organizers
  2. Fight The Flab!
  3. More Fight The Flab!
  4. Limit Creativity, Get Innovation
  5. Precious Moments
  6. 5 Ways to Improve Your Productivity in the Office
  7. A Geek’s Best Lifehack
  8. What Kind of Paranoid Are You?
  9. Being A Creative
  10. There’s No Time!
  11. The Mysteries Behind Motivation and How To Manipulate Them
  12. Time Management: Handling Disruptions in Daily Schedules
  13. Productivity Hack: Write Mini Process Flows
  14. Design an Online Workflow

Management, Self-Management, Entrepreneurship

  1. Bare Bones Project Hacks
  2. The 10 Beliefs of Great Managers
  3. The Simplest Path to Success
  4. Letting Things Go
  5. Closet Entrepreneur
  6. Time To Discard The Portmanteau
  7. 5 Important Keys to Bootstrap Your Entrepreneurship
  8. The Most Underutilized Tool for Effective Communication
  9. Everyday Performance Reviews
  10. Meetings, @&!!$*@ Meetings!
  11. What Are You Worried About?
  12. How to Ruin Your Career In Five Easy Steps

Procrastination, Goal Settings, Life

  1. 9 Steps to Define your Goal Destination and Devise a Plan to Get There
  2. Pro-Active Steps to Prevent Procrastination
  3. Improve Your Life By Following A Schedule
  4. The Causes of Procrastination And How To Conquer Them
  5. How To Make Resolutions You’ll Keep
  6. Literal Life Hack: Cut your window of time in half
  7. New Year’s Resolutions and Deficit Thinking
  8. 6 Sleep Tips
  9. Risks versus Rewards Worksheet
  10. 5 Tips for Getting Out of Debt (and Why)
  11. Deep Breathing: A Great Health Trick
  12. 8 Expenses to Cut and How
  13. Desk-side Fitness

Are there any lifehacks that you’ve learned over the past year?

Advertising

Featured photo credit: Rainier Ridao via unsplash.com

Advertising

Advertising

Read Next