December 23,2008
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Get Your Credit Rating Back, Pt. 3 –
– Launch the operation.F) Reduce fixed costs:
Everyday expenses are a fact of life. However, they are also the key of escape from the ‘poor people have poor ways' syndrome. Resolve right away to lose impulse and discretionary spending but don't stop there. Find ways to reduce necessary expenses by opting for less frills. Lower phone bills, power bills, fuel bills, cable options, etc. Limit smoking to a pack a day with a mechanical routine. Buy in ‘3-packs', if it's cheaper, but stow the stores in an inconvenient place, tapping it no more than once a day. They really do add up. Again, if you can secure a low APR credit card, pay all your utilities and essentials on this card and immediately apply the cash that would have been used toward the highest APR account. Auto insurance is an excellent choice because the insurers love those automatic payments applied to a credit card and they generally offer nice discounts on your billing arrangements to boot. Immediately apply any amount charged and all these savings as payment on the highest APR account you're paying on. Relentlessly drive that balance down. By all means, don't abuse the low APR credit card.G) Launch ‘Operation Debt-free':
Take an organized approach for a timely and highly effective result. Give it a name (handle) and think of creative ways to attack it. Use your tax return, hold a yard sale. Start using cash for everything and put away pocket change every time you have it. (But don't get into the habit of ‘breaking a twenty' every time you need a penny. Use common ‘cents' here.) Take on a part-time job and designate all income to ‘Debt #1'. Don't carry lose credit cards. Designate only one low-APR credit card and agree to only take it out of the safe for one designated specific essential at a time. Immediately encumber the cash value of all charges for application toward ‘Debt #1. But leave it at home and not easily accessible.