Just like a snowball rolling downhill, you can create your debt relief on your own and rid yourself of the financial stress.  Yes, it is possible – and you can almost certainly do it, however much you owe. 

The first thing to do is accept that your debt is not going to disappear overnight. It probably took many years to mount up and it will certainly take months, perhaps years, to work it off. Forget about winning the lottery. If you want to get out of debt you have to develop patience and determination. You also have to stop using your credit cards.

Next, work out how much you have to spend. Look at ways to decrease your expenses and increase your income so that you have enough to live on, pay your essential bills and make the minimum monthly payments due on your debts. Cut out any repeat billings that are not strictly necessary, like gym memberships and magazine subscriptions.

Then start to save. Before you can operate the debt snowball you should have minimum savings of $500 for a single person or $1000 for a couple or family. This money is for emergencies – not food or rent, you have to cover those from your income, but for example to repair your car if you need a car for your work.

The reason you need this amount of savings is so that if an emergency occurs, you will not borrow or use the money that you need for your monthly payments.

Then you can start the debt snowball. Make a list of all of your debts, large and small. Include everything, even $5 that you borrowed from a friend that they never expected you to repay. Arrange the list in order of how much you owe, lowest first (the total debt, not the monthly payment). You should finish up with a list that starts maybe with the $5 you owe your friend and ends with your mortgage or your biggest loan.

Now you will take all the spare money that you have each month – the money that you were putting toward your savings before – and start to pay off those debts, beginning with the smallest.

Some people will tell you to pay off the highest interest debts first and while this makes sense in theory, it does not work in practice because we are not motivated by saving a few pennies here and there. We are motivated by a sense of achievement, and we get that whenever we can cross one debt off our list.

Imagine how you will feel taking that $5 to your friend. Way, way better than if you put it toward one of the bigger debts. The effect of the debt snowball is to motivate you to keep paying off your debts by having you get that great feeling of achievement as often as possible in the beginning.

To maximize the feeling, give yourself a treat whenever you pay off a debt. Don’t make it an expensive treat of course, but do something that you enjoy. If you are married or have a family, the treat should be for all of you. Make getting out of debt a whole family experience.

Once you experience the feeling of paying off the first few debts, you will never want to go back. That is why it is called a debt snowball – you start it off and then it goes on rolling under its own momentum. Use the debt snowball to get yourself the best kind of debt relief.

‘Debt Cures They Don’t Want You To Know About’ is a book by Kevin Trudeau published May 2008 which claims to blow the lid off the finance industry. It is a follow up to his 2007 book, ‘Natural Cures They Don’t Want You To Know About’ which exposed the pharmaceutical industry and medical practitioners for covering up the fact that there are simple natural treatments for many conditions that are just as effective as prescription drugs, but ‘they’ (the medical establishment) are constantly pushing us into becoming dependent on pharmaceutical company products.

‘Debt Cures’ follows the same kind of pattern in claiming that the banks and other finance institutions are virtually ganging together in a conspiracy to push the population deeper and deeper into debt so that they can make money from all of the interest that we owe.

This is an attractive idea for many people who are in debt because it takes the blame firmly away from our shoulders and lays it on the credit card and loan companies. It’s not your fault – you were virtually forced into the spiral of debt that you find yourself in. That is Kevin Trudeau’s argument, anyway.

We grow up accepting that it is normal, natural and even wise to be in debt. Perhaps in some cases it is. Take mortgages for example. Your parents and grandparents may have warned you about living within your means, but did they ever suggest you shouldn’t take out a mortgage because you would be getting into debt? I doubt it.

For most people, a mortgage is a very good financial proposition. It often works out cheaper than paying rent, at least after the first few years, and at the end of the time you own the house. It’s almost a no brainer, if you have the salary to afford it.

The problem is that most of us do not understand the difference between taking out a loan to buy an asset that will increase in value, like a house or perhaps a business, and getting credit for things that will never again be worth what we paid for them. That includes cars, furniture and all the little things that we put on our credit cards.

When you get into debt, banks will offer you more cards and loans until the point where it becomes almost impossible to pay. Then they pull the rug out from under your feet. No more loans, your cards suddenly don’t work, and the credit score system makes sure that all of the other finance companies instantly know that you are a bad risk. That’s where the conspiracy idea comes in.

In the end though, we could say that it doesn’t really matter whose fault it is. If we are in debt then nobody is going to help us get out, that’s for sure. Certainly not unless we pay them for their advice.

‘Debt Cures’ is a little repetitive in places, but it gives you some good ideas for reducing your debt and even eliminating parts of it. There are web addresses for internet sites where you can pick up free reports on how to reduce different types of debt. Some of the tactics he suggests are not workable in every situation but you should find some hints in there for dealing with all types of debt.

There are more comprehensive debt management books out there but this one is simple to read and excellent for anyone who doesn’t know where to start. If you have not begun tackling your debt yet, ‘Debt Cures‘ by Kevin Trudeau should give you some ideas that could quickly help you save much more than the purchase price.

Debt negotiation is something you may need to do if you cannot make your payments on your debts. You can talk to your creditors and discuss ways that you can pay, which might suit you better than the payments you are currently due to make.

When you are having difficulty making your monthly payments, it is very important to act quickly. Many people put this off and hope the problem will resolve itself. It will not.  

Do not think that nobody will notice if you miss a payment. Your creditors (the banks, credit card companies and others that you owe money to) will always notice. They have computer programs set up to alert them any time a payment is more than a certain number of days overdue. They may not contact you right away, but they know! (continue reading…)