Entries Tagged 'debt' ↓

“Some debts are fun when you are acquiring them, but none are fun when you set about retiring them”

- Ogden Nash

It is easy to accumulate debt, but to reduce debt often feels like an uphill struggle. Yet, unless we reduce and manage our debt, we will always be carrying a heavy weight around in our mind. Here are a few strategies we can take to reduce our levels of debt.

1. Increase Earning Power.

The internet provides a great scope for making extra money through blogging. To be successful in making money online is not easy, but, if we are determined and are careful in our strategy it can make a useful second income; some bloggers are able to even retire from their full time job. The secret of making money online is to choose a niche where you are knowledgeable and make your website really stand out from others. You will need to write good content and you will need to work on promoting your articles and networking with others. However, if you are able to do this there are many ways to monetize it.

• Hint: It is also worth choosing a profitable keyword like Mortgages.

Basically, ask yourself are your keywords about things which people buy? If they are advertisers will be willing to pay more.

If blogging does not appeal to you, no harm, there are many other streams of income. The point is that we need to be inventive and proactively look for new avenues of income. It would be a mistake to feel our income is fixed. If we start looking and being receptive other earning opportunities will present themselves. These other opportunities do not necessarily mean a longer working week. Some income streams are compatible with working less. But, our mental attitude is of great significance - it is important we maintain an expectation, or at least aspiration, that we can earn more.

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2007 has seen unprecedented rises in personal debt, with UK households paying more in debt than ever before.

Figures from UK treasury reveal that the average family’s total personal debt now accounts for 164 per cent of their annual income, the highest figure in the developed world, and the highest figure in the UK’s history. In 1997, the figure stood at 105 per cent. The % spent on interest payments has risen from 6.5% to 9%.

Reasons for the rise in debt include:

• Rising house prices
• New types of loans and mortgages
• Change in cultural factors which make debt more acceptable.

ANother problem that could face homeowners soon is that 2.3 million fixed rate mortgages were taken out during the record low interest rates of 2003 and 2004. These fixed rate mortgages are likely to end soon, leaving many facing higher interest rate payments.

This means the recent rise in interest payments may soon have a biting effect on the UK housing market and UK economy .

How to reduce and eliminate debt

Why has debt increased in the UK?

Top 5 Tips for reducing mortgage debt

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Personal Finance Carnival

To reduce and eliminate your debt there are many steps that you can take. The most important thing is to create the right attitude to money. It is important to avoid feeling helpless. Take each problem one step at a time and work on a plan to improve your financial situation.

1. Think positive

Many in debt have a negative attitude to debt. If you maintain an attitude “there’s nothing I can do about it” - it becomes a self fulfilling prophecy. It is important to discard pessimistic attitudes; instead, quietly work on doing things that will help.

2. Don’t Procrastinate

Often we are aware of things that will help, but will delay putting off doing them. Often, the reason for our procrastination is that we fear dealing with the debt we are in. However, procrastination just delays the problem and allows it to get bigger; procrastination never helps, if we are not careful we can be unaware of how much we procrastinate.

3. Prioritise

It is important to do the things that are most pressing. If you have debts in various places, look at consolidating them in one place at the lowest interest. A relatively small act like this can make a big difference in reducing interest payments and simplifying your situation. (debt consolidation)

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