Want to be DEBT FREE? Debt Consolidation may be the key!

What does it mean to be Debt Free?

Survey everyone in the United States of America, and you'll be hard pressed to find someone who is truly debt free. Most Americans, including those who are financially secure, have some kind of debt. Whether it's a mortgage, student loan, or easy monthly credit bill, it's still debt. The main notion behind the term "debt free," is acquiring debt responsibly, and having ample income available to repay it.

Many consumers believe being debt free is living in the lap of luxury. This is not necessarily the case. One who has his financial situation under tight control experiences a feeling of independence. It doesn't mean he has money to splurge on expensive items like fancy sports cars and exotic vacations. He simply lives within his means.

Many people have used debt consolidation for getting debt free. Some are able to successfully get themselves out of debt simply by learning to control their spending habits. Click Debt Consolidation recommends following this simple 9 step process to achieve debt free living:

1. Know what you owe: This first step helps you evaluate your current situation. Make a file in which you gather all your outstanding bills and statements. Study them thoroughly. You may find some items or services that are totally unnecessary and immediately cancel them.
   
   
2. Change spending habits: This takes a lot of willpower. You must stop overspending. Prevent debt from growing by even a single penny. We suggest the "if you can't eat it, you can't buy it" approach. Use spare cash available at the end of each month to repay your debts. Payoff items that charge high interest first such as credit card debt.
   
   
3. Squeeze your budget, free up resources: Do everything in power to lower monthly bills. Eat out less frequently, stop buying presents, or take cold showers. Allow yourself to be creative when searching for ways to lower expenses. Whatever money saved should be used for repaying debts.
   
   
4. Decide on a method for getting out of debt: From debt consolidation to bankruptcy, every solution has pluses and minuses. Consult with professionals and find the option right for you.
   
   
5. Find a reputable agency: Make sure the company you work with has a solid reputation. Dealing with collection agencies is hard enough; you don't need trouble with people who are supposed to help.
   
   
6. Negotiate with your creditors: Chances are you can negotiate a debt reduction with creditors. Many creditors fear clients default their loans and agree to lower the amount.
   
   
7. Pay it up then throw it out: Once finished paying off a credit card, seriously consider tearing it up. Will you be able to withstand the urge to rack up purchases on the newly cleared credit card?
   
   
8. Be careful when using the equity of your home: Many homeowners decide to use the equity of their home for a debt consolidation loan. Interest rates on home equity loans are much lower than those charged on credit cards. In addition, interest paid on a home equity loan may be tax deductible. Don't allow yourself to fall into the pit of credit card debt once again.
   
   
9. Seek professional help: Find it hard to control yourself from overspending? You may be suffering from a psychological problem. Just like drugs, alcohol, and gambling, overspending requires professional help. Many times individuals need treatment for years even after debts have been paid off. Consider consumer credit counseling, a helpful tool for controlling overspending habits.