Getting Out Of Debt

One of the most fundamental financial goals that many people have is getting out of debt.As unexciting as it sounds,this is the first step to building real financial security.Once you have your debt under control,then you start thinking about fun financial goals,such as saving for the Caribbean vacation,and goals that give back over time,like retirement saving.
Getting out of debt does not necessarily mean paying every cent you owe.For most people,this is simply impossible,especially if they have a mortgage.What it does mean is paying off as many debts as possible,starting with those that have the highest interest rates,such as credit cards.It also means settling any delinquent debts to prevent further damage to your credit report and to get the creditors off your back.
If getting completely out of debt is impossible because you have a mortage or other major debt,such as student loans,concentrate on reducing your debt to a level you can live with.According to financial experts,your total debt should be less than 25 percent of your annual salary,although this varies depending on your age,income,total assets,and total liabilities.
However,if your debt consists of a few credit card balances,a car loan,and perhaps a small bank loan,then paying off all of your debt in the next few years should be a reasonable goal.But,you need to make sure you don't add new debt as you pay your old debt,or you won't get anywhere.This means putting credit cards in the deep freeze,passing up a new car loan and paying cash for a decent used car,and being aware of all the other debt traps you can fall into,then avoiding them.
Just as with any other financial goal,if you goal is to get out of debt,you need to settle on the amount you want to apply toward your debts,give yourself a deadline,and then save a set amount every month.With a little determination,you'll probably be able to wipe your debt slate clean much sooner than you expected.
It's a good idea to get out of debt before you retire.Living on a fixed income after retiring can be a strain,creatiing more temptation to abuse your credit cards.Ideally,while you're still young,you should start socking away some of your savings in a retirement plan,to ensure that your golden years are comfortable and worry-free.