Debt Repayment Plans That Don’t Work

There are a million people out there telling you how to pay off your debt. You have to consider your personal spending habits and reasons before you are able to make a debt repayment plan that works for you.

For many it takes a combination of different methods to find a formula for success. Getting out of debt is a wonderful goal, but often in desperation it leads to many mistakes. And these mistakes can end up costing you more in the long run.

There are a few methods you should avoid. Many experts will tell you to go ahead and take out a home equity line of credit or loan to pay off your credit card debt, especially if they want you to borrow from them. It’s not a good idea.

Credit card debt is unsecured debt. There are no assets that can be taken if you fail to pay them like your car, home or belongings.

A mortgage, equity loan or line of credit is a secured debt. If you don’t pay you will lose your home.

You should also avoid using a 401(k) loan to pay off your credit card debt. Your contributions to your 401(k) are not taxed. So when you pay yourself back you are using after-tax money, but you are still losing money.

When you take money out for retirement, you will absolutely be taxed for it again. Not a great financial move.

So don’t use your home or your retirement as a way to bail yourself out of debt. Remember the tried and true is always your best bet. Create a budget, spend less, pay more on your debt, negotiate with your lenders and work hard.

Some Of The Best Debt Repayment Plans

Mary Hunt is one of the top financial-guru’s of our time. Here are her top four recommendations. What sets her apart from all the other authors is that she conquered those same staggering debts in her own life

No more new debt and this should be self-evident. No debt payoff plan will work, not a one of them, if you’re taking on more debt.

If the debts you’re currently paying have declining minimum payments, you must pay the same amount every month until those debts are paid. Disregard any declining minimum payments.

Keep paying the same amount towards the debt, or more if possible, month in and month out. After a few months, you’re accomplishing exactly what financial pros advise: Always pay more than the minimum.

List your debts according to “duration until payoff” (balance plus interest, divided by payment). The debt with the shortest payoff time goes at the top. From there, list each debt in ascending order, by duration until payoff.

Now rearrange your debts in order of smallest “duration until payoff” to largest. This is the order in which to launch your torpedoes and start sinking those debts.

Another occurrence of the snowball method of debt payoff is to compound your payments. When you pay off one debt in full, take its monthly payment and add it to the payment of the next debt. When that debt is paid off, take its payment money and add it to the next payment and so on.

What Is Positive Thinking?

Do you have to be in an upbeat, cheerful and enthusiastic mood all day to be positive minded? No! Positive thinking simply means the absence of negative thoughts and emotions, in other words, inner peace.

When you are truly at peace within yourself, you are naturally thinking positively. You don’t have to fight off negative thoughts, or search desperately for more positive thoughts; it just happens on its own.

Having daily happiness and success is all about developing a habit. You’ll need to start making a few changes in your life to experience this on a regular basis and you’ll want to create an environment that encourages both of these qualities.

One of the first things you’ll need to do is to develop a “happy habit” to change the way you look at things. Keep the focus on the bright side and think of the good most of the time. You may find that your mind will try to drag you down and look at the negative things more often than you’d like, but you have the power to change that focus.

If you choose to center your thoughts on the bright side of the situation, you’ll soon find yourself well on the way to developing the habit. Those that make positive thinking a key goal in their lives tend to experience more daily success and happiness because their visualization attracts their desires.

Make Positive Thinking Work For You Financially

In order to have success with money you have to believe in yourself and tell yourself that you will. “I will be a money and financial success because I believe in myself and in my abilities to make all my financial dreams come true.”

Believe it or not simple phrases repeated over and over really make a difference. Instead of complaining that you never have enough money for the things you want, be thankful for the money you do have and the control you have over it.

Good money management involves being truthful about your spending habits, prioritizing what you spend your money on and enjoying the abundance that is already in your life. Don’t be weak around money, be powerful. Tell yourself that you have the ability to manage your money well.

Get rid of negative thoughts like “I don’t have enough money”, “I hate bills”, and “I can’t afford it.” Instead say, “I will always have enough money for the things that matter most”, “I will pay my bills because I appreciate the benefit of the services purchased” and “I chose to save instead of spending on something that isn’t really important to me.”

It’s also important to acknowledge that you have the power to spend money on the things that you feel are personally worthwhile, not carelessly because others choose to.

Money and finance should not be a burden it should be a joy. When you change your attitude about money from a negative to a positive view you free yourself from stress and worry.

Your attitude and view control your entire world. More you envision your dreams in a positive way and repeat them verbally to yourself consistently, they will seep into the subconscious mind to cultivate the new positive you.

Being grateful and thinking positive go hand in hand for daily happiness and achievement in any area of life that you choose success in.