Lower your Debt, RIGHT NOW!

This is more for those who have just graduated college, although some of the advice is good for all. As we preach non-stop, get out of debt, get out of debt now! You can not imagine how good it feels to owe NOTHING! When you owe nothing, you own everything! Your life is your own!

Let's look at some of Kiplinger's ideas to debt reduction.

1. Consolidate your student loans
Consolidating your federal loans is like refinancing your debt into a single loan at a fixed rate.

2. Shop around for the best student loan perks.
Thanks to recent legislation, you are no longer required to consolidate with the lender who holds your student loans. You now can shop around for the one that offers the best terms that will help you trim your debt even further. For example, look for a lender that offers a discount on your interest rate if you opt to have your payments electronically debited from your checking or savings account each month and another rate reduction for making on-time payments over a 24- or 36-month period. Such perks can typically shave between 1 and 3 percentage points off your rate, saving you hundreds of dollars over the life of your loan.

These are both great ideas. People are shocked when they look at what just a 1% reduction in interest will save them over the life of a loan!

3. Ask your credit card company to lower your rate. Sometimes a solution really is this simple. A five-minute call to your lender could save you hundreds of dollars on interest charges. In 2002, the U.S. Public Interest Research Group asked 50 consumers of varying credit backgrounds to call their lenders and ask for lower rates. The strategy worked for more than half of the group, with the average rate reduction going from 16% to 10.5%.

4. Shop for a lower-rate credit card and transfer your balance. If your credit card company won't lower your rate when you ask -- or it won't lower it far enough -- shop around for a better deal. Once you have been making regular payments on your college-issue card for a while, you might have built enough of a credit history to get a lower-rate card elsewhere. Watch out for introductory offers, though. You don't want to get reeled in with the promise of a 5% rate only to find that it'll shoot up to 18% after three or six months. Unless you're confident you can pay off your entire balance within the introductory time frame, you'd probably be better off with a card charging a fixed rate.

5. Scrap the monthly fee. Your low-rate card may not be the deal you think it is if you're paying an annual fee. For example, if you pay $40 each month toward a $1,000 balance on a card with a 12% interest rate and a $50 annual fee, that's equivalent to a no-fee card with an 18.4% interest rate.

The killer of this nation, credit cards. There is nothing that can be more evil and destroy your independence faster than a credit card. Yes, they are necessary in life, but make sure you control them and not the other way around. Kiplinger's advice on the subject of credit cards is great! Follow it!

6. Trim the fat from your spending.

We like the title of this advice, just not all the rest that they give you. So, sticking with the title, we say, trim the fat and use the excess to pay off your debt! Be careful when trimming the fat that you don't go to far. Life is to live and enjoy! If you trim so much that you get rid of all the joy you'll just end up rebounding and going on a spending spree that will set you back years in your quest to become debt free! You need some excesses in life. You need to do those things that make you feel good. Just don't go overboard!

Of course, these are the things that we excel at. If they are giving you problems, give us a call! We are here to help!

Finally...

7. Stop using your cards. "If you're paying down one credit card and charging up on another, you may as well be a hamster on the wheel going around and around -- you're never going to get off," says Dvorkin, and you won't save any money. Put your credit cards away, and you'll whittle away at your debt faster, as well as spare yourself a future of more debt. But don't close the accounts -- having unused credit available from lenders you've been with a long time can actually raise your credit score.

We agree with this to a point. Put those cards away while you are paying off your debt. Once that debt is paid off, use your cards, just make sure to pay them off, completely, at the end of each month! NEVER, EVER, EVER, NEVER, EVER carry a balance on your credit cards again!

Kiplinger didn't do a bad job of giving advice. With a few tweaks here and there, it becomes great advice!

Now go out and have an AWESOME day!