Finance Roll

No matter your current financial situation, there are plenty of ways you can begin paying down debt, building up a necessary emergency cash reserve, and even setting aside money for investing.

It's not easy living paycheck to paycheck, and it's no doubt causing plenty of stress. The bills eat up all of your income, namely those pesky credit card bills, and leave you little money to get ahead, to set money aside and to invest for the future. The good news is that the situation is not hopeless.

Every consumer has a way out, and in as little as six months, your financial picture could be looking a heck of a lot brighter. It just takes some sacrifice to get the ball rolling. Just as credit debt seems to grow and multiply exponentially, so too do the rewards of paying it down in larger and larger chunks each month and eventually getting out from under it entirely.

The problem many consumers have is that they try to save and invest money while still being saddled with a mountain of debt. This concept just doesn't make any sense. Why would you put your valuable money into low paying investments when that money could be used to pay off your high interest loans?

There's some comfort in having money invested, and many consumers feel justified in doing so when they feel they're at an acceptable debt level, but even so, this is simply ludicrous thinking. There is no acceptable level of debt when you have the power to pay it off or pay it down. We've been beaten to death with the notion that debt is O.K that we now gladly accept it even when it isn't necessary, as if it's some badge of honor. There's no reason to be in debt, and not being in debt doesn't mean you should spend more to put yourself in debt.

The first goal in paying down your debt is of course to start with the highest interest debts first. This can be accomplished either by directly paying them off or by transferring their balances to lower interest paying cards, or taking out a lower interest rate loan to pay them off. Don't take interest rates lightly. Even a reduction of just 1% in your net interest rate could save you thousands of dollars in the months and years to come.

By the same token don't get lazy with payments just because the majority of your debts are in lower interest rate accounts. This is absolutely something credit companies count on, and why they're willing to offer low interest loans to reduce credit card debt. The slower you pay back a loan, the more money they make over the long haul. Believe it or not they only want you to make the minimum payment, and they love it when your cards are maxed out. You should also consider canceling each of your credit accounts the moment they're paid off to avoid the temptation of using them further.

You won't be able to solve your cash problems over night, but by taking a proactive approach to paying off your debt, with the goal of being debt free, and not getting caught in the credit companies' concept of acceptable debt, you'll set yourself up to be much better off in the future, with more long-term money at your disposal than any lines of credit could offer you.