Taking Small Steps To Financial Freedom – Part 3

February 17th, 2008 | Stacey | Debt Management, Financial Independence, Financial Freedom Opportunities, Financial Freedom

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Our series of taking small steps to financial freedom offers common sense ways to get out of debt and achieve the financial freedom you truly desire. The last entry in our series discussed the importance of knowing exactly how much debt you are in. While denial is a comfortable place, ignorance keeps us from the financial independence we really want.

Now that you know the extent of your debt damages, you can start attacking them. The deeper your debt, the more vehemently you need to attack it so you can can finally get past it. Start by cutting up your credit cards. That’s right, just cut all your credit cards up and call the companies to cancel them. Keep one account of your choosing with a low credit limit and interest rate so you have access to emergency credit. Otherwise, cut them all up and get rid of the temptation to get deeper into debt.

Now start paying off those credit cards. Start with the credit card carrying the highest interest rate so you can save the most money. Pay double the minimum on just this one credit card and you will pay it off in half the time. Once this card it paid off, attack the credit card with the second highest interest rate and so on until you get rid of all those high interest credit card balances.

If you cannot pay off your credit card bills, pick up the telephone and talk to your creditors honestly. Explain your financial situation and offer to pay off your debt. When you fail to communicate, things get nasty and your credit rating may be compromised in the process.

Tomorrow we will discuss more ways to eliminate debt in our series about taking small steps to financial freedom.