Marriage

When Love, Marriage and Money Come Together

10 Steps to Financial Freedom:

1. Determine how much you owe. Gather your credit card statements, and make a list that includes interest rates, balances, and minimum monthly payments. List the cards by the interest rates they charge, with the highest rate first.
   
2. Keep the card with the lowest interest rate and cut up the others. Close those accounts.
   
3. If you don't have a card with an interest rate of less than 14%, get one.
   
4. Resolve that you will use your cards only for essentials over the next six months. For other purchases, use cash or a debit card.
   
5. Credit cards often require minimum payments of about 2.5%. If you just make minimum payments, you will be paying your debts forever. For example, if you owe $1,000 on a card with a 17% interest rate, it might take 12 years and cost over $900 in interest by the time you pay it off.
   
6. Calculate how much you can pay over the minimum. Try to stretch your budget. If the minimum payments on your credit cards total $350 a month, for example, how much could you pay if you really stretched? $750? No pain, no gain.
   
7. Apply any additional funds towards the card with the highest interest rate. If two cards have the same rate, apply additional funds toward the card with the largest balance. Pay the minimum on your lowest interest rate credit cards until you've paid off the balance on the more expensive cards.
   
8. Consolidate your debt. Many credit card issuers offer introductory rates as low as 5.9% for six months. If you're really serious about getting out of debt in a hurry, transfer your largest, high-rate balances to a card with an extremely low rate and pay them down aggressively.
   
9. If you are unable to transfer all balances to one low interest rate card due to your debt-to-income ratio or because you are juggling your card payments, then consider contacting a credit counselor at 1-800-320-9929. Debt management programs usually can help you organize debts into one low monthly payment, reduce or eliminate interest charges, and help restore credit ratings.
   
10. Consider using your savings to get out of debt. Sure it sounds harsh, but if you put together a balance sheet, your debt would cancel out your savings anyway. If you have money in the bank, you're earning about 2% to carry debt at 18% or more.