It's time to grow up and get rid of your debt. These guys know how!

So yesterday I did post on how to prevent and deal with hangovers. I’m finally over mine, so we can get right back into the juicy stuff. Now that I’m over my hangover I had a chance to look over my bank account. Even though camping is one of the cheapest activities (which you will here about another day), when you have no money and spend little money, you still feel it. I’m sure many of you have felt what I am feeling right now; a credit hangover. Here are ten tips Rate Nerd was nice enough to donate on how to beat a credit hangover and hopefully will make you look at debt and spending differently.

1. Don’t Panic- According to some fancy licensed attorney in the US, realizing that your debt is not the end of the world is very important. The attorney explains that creating a list of all debts you owe will help you deal with it properly and allow you to breathe.

2. Pay off high interest debt first- Determine what debt has the highest interest and work extra hard to pay them off first. Remember compound interest works in your favor only when you’re saving, not spending. The next thing you should pay off is your loans (mortgage, car, student) because compared to utility bills and medical bills; these companies will be the first to affect your credit rating. My darn credit card interest is like a gazillion percent! Grrr…

3. Understand your credit rating- Look for any errors and get them adjusted (I’ll be going through mine with a magnifying glass and my fingers crossed). This is the fastest way to improve your credit score. Also, do not cancel a credit card until you have the appropriate funds elsewhere.

4. Double Down- Very simply, pay double what the minimum payment is. Save that vacation or fancy new toy for later, put your helmet on and go against your debt head on.

5. Save your receipts- This is good for two reasons. If you save your receipts you can keep your eye out for price protection if something drops within a month (which is the usual price protection time frame). Keeping those receipts also helps you track your daily and weekly spending. I have like 6 McDonalds receipts personally.

6. Plan your spending- The biggest tip is to create a budget or spending plan. It helps if you create a second bank account that is only for spending, a sort of allowance type account. This ensures that you make your debt payments and cut down on spending.

7. Consolidate your debt- Place all your debt into one place to make it easy to keep track of. However, a warning goes to debt consolidation services offered by for-profit companies.

8. Re-gift or pay the price- If you haven’t used something then don’t let it clutter your space any longer. Just be cautious that you don’t give it back to the person who gave it to you!

9. Sell some stuff- Use eBay, Kijiji, or even Craig’s List to make a bit of extra cash. Take a look at the price of similar used items and what they are priced around. From personal experience get it on all the sites and you will find a buyer. Does anyone want my Pokémon cards?

10. Grow up- Realize you’re not a kid and take responsibility for your spending and your debt. Cut back on the frills and stick to necessities for the time being. There is no better time to start then now!

I suggest you check out the full article here and tell me not only what you think, but what do you do to cut back on your debt. Remember, with a credit card comes great power, and with great power comes great responsibility.

Let me know what movie that’s from and I’ll give you a shout out in an upcoming post. Members of the Blog Army are NOT included.

Just kidding, but seriously.

Makes Cents (6)

This entry was posted on Tuesday, July 28th, 2009 at 11:00 am and is filed under Living, Money. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Tags: Craig's List, Credit Card, Credit Rating, Debt, eBay, Interest, Kijiji, Pokemon, Rate Nerd, Recession, Screw You Recession, Thaddeus Bolton