Steps To Take To Reduce Indebtedness

Excerpted from the "Money Instruction Book"
by Paul Richard - ICFE Executive Director

1. Begin immediately. (Getting started can be the biggest obstacle.)
2. Make up a written plan of action.
3. Take on no new debt including a consolidation loan.*
4. Close credit card accounts by returning charge cards to issuers.
5. Maintain written accounting of all income and outgo, especially cash.
6. Begin collecting receipts to raise awareness.
7. Closely examine all expenses looking for ways to increase value.
8. Put all extra income towards paying off debts.
9. Start doing things yourself and do not pay for services.
10. Make all necessary sacrifices to eliminate debt.
11. Sell items that are losing value especially those with debt owing.
12. Make getting out of debt a family affair.
13. Contact creditors in writing to keep them informed and if necessary get temporary reductions in payments.
14. Utilize cents-off coupons wherever possible. Send in for rebates.
15. Review spending practices and habits, begin comparison shopping, etc.

* A consolidation loan may be workable ONLY if the loan interest is less than the interest on the debts to be retired AND paid- off charge accounts are closed AND the extra cashflow is put towards paying off the consolidation loan even faster. Otherwise in a year or two many people who only pay off and not close accounts are often paying off a consolidation loan and also new credit purchases.