Debt pressing in a sinking economy

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Debt pressing in a sinking economy
3 years ago
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Were you shocked to find out that the US and global economies are as reliant on debt to keep them afloat as you have been to live from month to month? The good news is that you don?t have to sit through days or weeks of politically-charged hearings before you can begin to tackle your financial difficulties. How?

By pressing your debts into submission. What do we mean by debt pressing?

One or the most barbaric medieval sentences ever meted out on criminals was death by pressing. The victims of pressing were staked to the ground, and covered with one stone after another until the accumulated weight of the stones crushed them.

As cruel as that practice was, it has a financial lesson to teach us. Debt pressing is the act of looking over all your debts and sorting them either from smallest to largest, or according to their interest rates from lowest to highest. When you've done that, decide which of them you want to press first.

Pressing the debt with the smallest balance first will give you the quickest results. If you're lucky the smallest one will also be the one carrying the highest interest rate. Otherwise you should consider pressing the one with the highest interest, because paying it off first will save you the greatest amount of money.

How do you press a debt? You simply add weight to your minimum monthly payment, with much extra cash as you can without hampering your ability to meet your monthly obligations to your other creditors. You target one bill, and each month scrape a larger-than minimum payment together by cutting back on your discretionary expenses.

Have you been meaning to kick that smoking habit or those pre-work lattes? Can you reduce your gas expenses by carpooling or taking public transportation? How about giving up the Netflix account and your monthly paperback purchases and getting your entertainment courtesy of your public library? Do you really need home DSL, or will a dialup account do as well? Almost everyone has a discretionary expense for which there's a cheaper (or free) alternative.

When you've found yours, take up the alternative, and add the money you save to add weight to your minimum payment on the selected bill. Continue to do this each month, and that additional money will soon have you minimum payment decreasing, so that more of the payment will be applied to your balance instead of to your interest.

When you have pressed the first bill out of existence, take the money you were paying on it and add it to the minimum payment on the second bill. When that one's paid, take the combined savings from the first two bills and apply them to the third. By the time you've started working on your final bill, the weight of your monthly payments should have it pressed into oblivion in a surprisingly short time!

The best way to get financial pressure out of your life is to start applying pressure of your own to those monthly payments. The heavier you make them, the more easily you can stay afloat in our sinking economy!

By troshus
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