Your Debt Reduction Planning Tools

With the economy in such a poor state and many people losing their jobs, or having to take less pay, there is a bigger portion of the population that has resorted to living off of credit. When the time comes to pay off your debt and get out from under it all, using debt reduction planning tools can really help make a lot of difference.

Finding the right tools for you and your situation is as easy as surfing the internet. There are many things that you can use that can help you get a clear picture of where you are, a clear picture of where you want to be and, most importantly, a set plan on how to get there.

Debt calculators are one such tool because it will allow you to factor in the amount of interest you are paying on any particular bill. You can use the calculator by determining the date you want to be free and clear and the calculator will figure the amount that you will need to pay every month in order to reach that goal. As long as you don't incur additional debt, such as continuing to use a credit card or line of credit, the calculator can give you an exact time frame for when you can be debt free.

In order to make sure that the numbers you are plugging into a debt calculator are accurate and that you can make those payments every single month, it's important to come up with an exact budget in your debt reduction planning strategy. You need to have a clear picture of how much money you have coming in the house every month and how much goes out every month. Only then can you accurately calculate when you will be debt free.

In order for your budget to work you have to make sure to include everything. If you buy coffee every day when you go to work (and you're not willing to stop doing so) you need to include that amount in your budget. It's easy to remember the big things like car payments and mortgage payments, or the things where you get a bill in the mail every month,but the things that you might have trouble thinking about and including in your budget are things that you don't have to do every month such as dry cleaning, pet expenses, seasonal expenses, etc. Make sure that you take all of that into consideration before you make out your budget. The more accurate your budget the fewer bumps in the road to financial freedom you'll encounter.

Also, don't be afraid to contact your credit card companies and see what, if anything, they are willing to do to help. Just make sure that whatever they do to help doesn't have a negative impact on your credit rating.

There are a lot of tools and methods you can incorporate in your debt reduction planning strategy but the one best thing you can do for yourself and your financial health is to get started right away.