Debt Relief and the Importance of Getting Your Priorities in Order

Up until now, you might have considered credit card debt last on your list. After all, it is unsecured debt. However, you are now on a debt relief quest. You have decided that you no longer want to keep living with the collection calls and letters. Therefore, you have gone ahead and started paying any bit you can to the credit card companies or you have took steps to enroll yourself in a debt relief program. You are on the right track, but if you are serious about everything you need to get your priorities in order (in terms of your personal finances).

* Decide What Must Come First - As much as we'd like to focus on paying off our overdue bills, there are some necessary things that come first. If you own a home, that is your mortgage. If you rent an apartment, that is your rent. Others that fall into these categories include food, heat, water, and electricity. If you use your car to get to and from work, any car related bills (such as an auto loan, insurance, and gas) are necessary too. Due to emergencies, you'll want to include your phone bill in this category.

* Decide What That Leaves You With - You can do this by totaling your paychecks (and your spouse's if you are married). Here is how much you make for the month. Then, subtract the above mentioned expenses. Remember, these should only be the things that are necessary. Subtract their total costs from your income. This is the money you have left over.

The thing here is that most of us have more expenses than the so-called necessary bills. We might have an internet bill, a cable bill, and a bunch of little purchases (like for eating out). You now want to add these in as well, but be sure to keep them separate. Once again, subtract them for your budget. Look at what you are left over with.

So lets say that after all your necessary expenses, you are left over with $500 a month. After you subtract your not-so necessary purchases, you realize that you are down to $150 a month. This is still money that can go towards your debt relief quest. This is still money that will pay off some of your overdue bills. The thing is that if you owe a lot, this $150 won't put that big of a dent into your total debts. That is where it comes time to prioritize your bills.

Now, I am not necessarily saying that you need to go without. We watch TV to stay up-to-date on the news, but do you really need 100 plus channels that you don't watch? If you don't want to go without, consider lessening your package. Do the same with your internet and possibly your landline and cell phones. As for eating out or buying new clothes, it is best to forego these all together until your quest of seeking debt relief has been done. It will be hard, but you will notice more money in your pocket when you are 100% debt free.

If you are over $10,000 in unsecured debt you really should consider getting a debt settlement. Creditors of unsecured debt are fearful of collecting and they also have stimulus money to make debt settlements financially feasible for them. Once the economy turns around it will be too late to eliminate your debt. Check out the link below to locate legitimate debt relief companies in your area: