Here’s How to Get Out of Credit Card Debt

While we all would ideally pay off our credit cards in full every month, that doesn’t always happen. Plus, modern life often forces us into debt.

If you want go to shopping, buy a car, or own a home, you’ll most likely take out loans to pay for these things. Even if you do keep your credit card usage in check, it’s difficult to remain completely debt-free.

But fear not! While your mountain of debt may be daunting, it’s possible to get to the top and clear your financial burden!

In this post, we are going to tackle your credit card balances.

Settle Your Credit Card Debt

Try these tactics to reduce and eliminate your credit card debt:

1. Pay off more than you use. The only way to gain ground on your credit card balance is to pay off more than you use. If you make the minimum payment of P2,000 and then spend P5,000, you’re not going to be getting out of debt anytime soon. Also, be sure to take into account the interest charges as well as other fees when calculating each month’s total expenditure.
2. Pay off small balances first. If you have a card with a balance of only a couple of hundred pesos, paying that one off first will quickly eliminate one bill altogether.  On top of that, eliminating the balance in your credit card will give you a motivational boost to use pay your credit card balance wisely.
3. Make high interest cards the priority. While the above rule is helpful in a particular situation, focus on settling higher interest cards first and knock them out of the way.
4. Once a balance is paid off, use the money for that payment to pay off other balances. Knocking a credit card balance out is a major relief! It’s one less payment you have to worry about and one less monkey on your back. Use this success as momentum to take care of the other bills.

Follow this strategy:

  • Pay off credit card #1.
  • Next month: Add the funds to your payment for credit card #2.
  • Pay this doubled amount on credit card #2 every month until it’s paid off.
  • Once those two cards are paid off: Add the funds from credit cards #1 and #2 to pay card #3.
  • Pay this tripled amount on credit card #3 every month until it’s paid off.
  • Next: Add in the payments from cards #1, #2, and #3 toward card #4.
  • Continue this strategy until you’ve eliminated your credit card debt.

This will greatly speed up the overall process of getting your cards paid off and wiping the slate clean.

What’s really amazing is that, once you’ve paid off your first card, you’ll be able to use this strategy without paying more for your monthly bills than you were in the first place. Yet, the momentum gets bigger and bigger for eliminating that debt, like a snowball rolling down a hill.

5. Avoid skipping payments. If you do miss a payment, they’ll add the missed payment to the next month’s bill in addition to the interest, late fees, and maybe even over-limit fees. This could even cause your annual interest rate to increase. Once this starts, it’s difficult to get out of the situation. The charges add up quick and your balance will skyrocket.

Not only will this affect your balance, but the credit card company will also call you. Avoiding the call only makes things worse. You would think that they would get the point, but they don’t. They will call, and call, and call, and call. It’s incredibly annoying and you’re better off doing whatever you can to avoid missing the scheduled payment.

6. Debt consolidation can be your friend. Often times, it beneficial to consolidate your debts into just one balance from one creditor. Not only you can take advantage of a better interest rate, you’ll also eliminate a couple of your monthly charges.

If you can get a loan from the bank, it can help you out. Using that money to pay off your credit cards will reduce your overall interest charges. When going this route, avoid using your credit cards again after paying them off. That defeats the purpose entirely and will result in your debt becoming worse than it was before you started.

Many credit card companies offer a lower interest rate for the first year on a new card, and they invite you to transfer your balances from your higher interest cards to your new one. On these offers, be sure to read the fine print. Many things, including one late payment, can void the initial offer and result in an increased interest rate even higher than you had on your old cards.

Consolidating your debts can free up money that you can use to pay down your remaining balances. It’s one more way you can get out of debt without using any more money than before you started.

7. Use your salary bonus to pay down your credit card debt. If you come across some extra cash, use the money to pay off as many of those balances as you can. In essence, your windfall is multiplied when you think of all the money in interest charges it will save you.

Plus, the faster you become debt-free, the faster you can use your money for whatever you want rather than just sending it all to your creditors!

Eliminating your credit card debt can bring you immense relief and greatly enhance your financial future.

So what’s next after you settle all of your credit card debt? Should you get rid of it? My answer is: “it depends” on how you are going to use it, if you use your credit card to automate your payments like payments for utility bills, insurance, subscriptions, etc., then I would suggest that you keep it for the sake of convenience.

How to Save Money for Future Expenses (The Old Way)

Saving money is one of those things that almost everyone considers a “good idea” but too few people actually do to a large enough degree. We all have our reasons: Not enough income, too many bills, no time to check out the available savings plans. Unfortunately, the need to save will haunt you even if you stall for time. Unless you inherit a fortune, win the lottery, or simply earn so much money that you have all you’ll ever need, you simply won’t succeed at building wealth unless you save.

 There are all sorts of savings plans that will suit long term as well as short term goals. Even on a daily basis, you can find ways to tuck money away for a rainy day.

 How to Save

 Here are some easy strategies to help you get into a regular habit of saving money

  • Create a separate spot for savings. Whether it’s a sock drawer, an old wallet, or a separate bank account, one of the best ways to save money is to stash it somewhere and essentially forget about it. Use the concept of “out of sight, out of mind” to put the money aside. It can be the leftover money from your paycheck or even P500 a week, but if you make sure to put money aside consistently, you’ll find that you can accrue a good chunk of change. In this digital age we live in, you can set up systems like this automatically with your bank. With a few clicks of the mouse, you can have the bank transfer money from your checking to your savings account with no work needed on your part. Your bank can set up your transfers according to your preference, such as weekly, bi-weekly, or monthly.
  • Remember that small deposits can add up quickly. Do you feel that saving money means you need to set aside huge chunks of dough in order to be worth the effort? The truth is quite the opposite! Even if you can only put aside a couple of pesos here and there, that will add up later on down the line. Remember that short-term savings should be equivalent to 3-6 months worth of your current income- this is also known as your “Emergency Fund”. The surplus should be placed in high yield investments such as stock, bonds and mutual funds- for your wealth creation, which is to be discussed later on.
  • Find bargains wherever possible. One of the best ways to save money is to keep your eyes open for money-saving opportunities and take advantage of them. For example, many of your day to day expenses can be reduced simply by changing your routine. If certain expenses are important to you, however, simply make your changes in other areas. Some financial experts talk about how, if you stop drinking Starbucks forever, you can become a millionaire. They use this logic to say that any spontaneous purchase is a devastating blow to your retirement. Saving is important, but viewing every purchase as a grievous offense is a faulty way of looking at it.

Keep your Starbucks, if you like, just find other ways to make up the difference. Finding a more efficient solution can be a great way to keep more money in your pocket. If, for example, you enjoy having a soda while you’re at work, rather than going to the vending machine and spending a peso (or more) on a bottle, buy a 24 pack and bring it with you in a cooler. It’s much cheaper and it can save you a substantial amount every week.

You can use the same strategy for lunch. The best way to save money on lunch is to bring one from home. You’ll find that the amount you spend on two or three restaurant meals could provide you with two or three weeks of meals from home. Save the eating out for when it’s important to you.

Even when money is tight, you can still enjoy seeing your savings grow when you combine automatic withdrawals with simple daily saving strategies. For example, you can put the money you save from changing a few routines into an interest-bearing savings account.

How Does a Statement of Income and Expenses Can Help Me Achieve My Financial Goals?

Whenever we find ourselves on the brink of cracking our piggy banks, the first question we ask is, “Where did all my money go?”

Preparing an income and expense statement would answer this question. Whereas the net worth statement describes a person’s or family’s financial position at a particular time, the income and expense statement captures the various financial activities that have occurred over time—usually over the course of a month or a year. Equally important, the statement allows you to evaluate the amount of saving and investing during the period it covers.

Income: Cash In

Income is the inflows of cash for an individual or a household.

Common sources of income include earnings received as wages, salaries, self-employment income, bonuses, and commissions; interest and dividends received from savings and investments; and proceeds from the sale of assets such as stocks and bonds or car.

Other income items include pension or annuity income; rent received from leased assets; alimony and child support; scholarships, grants, and Social Security received; tax refunds; and miscellaneous types of income.

Expenses: Cash Out

Cash payments for living expenses and other items make up the second component of a cash flow statement. While every individual and household has different cash outflows, these main categories, along with the sub groupings will help you determine how you should categorize your expenses.

  • Fixed expenses are payments that do not vary from month to month. Rent or mortgage payments, installment loan payments, cable television service fees, and a monthly train ticket for commuting to work are examples of constant or fixed cash outflows.
  • Variable expenses are payments that vary from month to month. Common examples of variable cash outflows are food, clothing, utilities (such as electricity, telephone, cable, and Internet), recreation, medical expenses, gifts, and donations.

The use of a recordkeeping system is necessary for an accurate total of cash outflows.

Cash Surplus (or Deficit)

The third component of the income and expense statement shows the net result of the period’s financial activities. The difference between income and expenses can be either a positive (surplus) or a negative (deficit) cash flow. At a glance, you can see how you did financially over the period.

A positive figure indicates that expenses were less than income, resulting in a cash surplus. A value of zero indicates that expenses were exactly equal to income for the period, while a negative value means that your expenses exceeded income and you have a cash deficit, which must be made up by withdrawals from savings or by borrowing.

You can use a cash surplus for savings or investment purposes, to acquire assets, or to reduce debt. Adding to savings or investments should increase your future income and net worth, and making payments on debt affects cash flow favorably by reducing future expenses. In contrast, when a cash deficit occurs, you must cover the shortfall from your savings or investments, reduce assets, or borrow. All of these strategies will reduce net worth and negatively affect your financial future. This report provides data on your income and spending patterns, which will be helpful when preparing a spending plan. A cash flow statement provides the foundation for preparing and implementing a spending, saving, and investment plan.

Download a FREE Statement of Income and Expenses worksheet Here.

What is Your Net Worth?

Your Financial Condition

Your current financial position is the starting point from which you should evaluate your progress toward your financial goals. Your Net Worth reflects your financial condition. They help you measure where you are now. There are three main components of net worth: Assets, Liabilities and Net Worth.

Assets are cash and other tangible property with a monetary value. Available cash and money in bank accounts pooled with other items of value are the foundation of your current financial position.

  • Liquid assets are cash and items of value that can easily be converted to cash.
  • Real estate includes a home, a condominium, vacation property, or other land that a person or family owns.
  • Personal possessions are a major portion of assets for most people. Included in this category are automobiles and other personal belongings. These values probably need to be revised over time, thus, you may list your properties at their current value (also referred to as market value).
  • Investment assets are funds set aside for long-term financial needs (stocks, bonds… etc.)

Liabilities are amounts owed to others but do not include items not yet due, such as next month’s rent. A liability is a debt you owe now, not something you may owe in the future.

  • Current liabilities are debts you must pay within a short time, usually less than a year. These liabilities include such things as medical bills, tax payments, insurance premiums, cash loans, and charge accounts.
  • Long-term liabilities are debts you do not have to pay in full until more than a year from now. Common long-term liabilities include auto loans, educational loans, and mortgages. A mortgage is an amount borrowed to buy a house or other real estate that will be repaid over a period of 15, 20, or 30 years.

Your Net Worth is the difference between your total assets and your total liabilities. This relationship can be stated as Assets – Liabilities = Net worth

Net worth is the amount you would have if all assets were sold for the listed values and all debts were paid in full. Remember, your net worth is not money available for use but an indication of your financial position on a given date.

That’s it! Nothing complex, you just need to determine your assets and liabilities, and list them down on our worksheet. There is no right or wrong answers. Don’t be judgmental of yourself as you evaluate your condition. What you will find out as you compute your net worth may or may not delight you; you may possibly come away from the exercise either reassured about your financial condition or worried about it. But only by evaluating your financial picture in an open-minded manner can make you aware where you stand and deal with the situation.

Your current financial position is the starting point from which you should measure progress toward your financial goals.

Download a FREE Net Worth Worksheet Here.

How is Motivation Related to Financial Goal Setting?

Financial planning is by description a prospective exercise. Since we can’t anticipate the future, we have to make certain assumptions about what may occur, and then plan for contingencies.

The process of setting and then achieving financial goals is the best way to get from where you are today to where you want to be in the future. As someone once said: “Success is goals- and all else is commentary”. Your time and your life are precious assets which are irreplaceable. By learning how to set good financial goals and then follow through until those goals are accomplished, you will be able to achieve more than you ever before imagined was possible. All that’s required is that you understand and then apply the principles of effective goal setting.

To achieve whatever level of success you aspire to, it isn’t necessary to reinvent the wheel. The principles of setting goals and working hard to achieve those goals have been the process by which millions of men and women have led lives of great success. If you apply the same principles in your life, you can have comparable success. Therefore, don’t waste time trying to discover the secret of great achievement and success. Instead, become an expert at setting and achieving goals. It’s all you need to know and do.

How to Create Your Financial Goals

Most people today never take time to discern their financial goals. They just don’t get adequately organized, and making financial decisions as each new circumstance comes up. Yet a realistic framework is essential to the procedure of accomplishing your goals—not just the goals you’re aware of, but also those you may not even have yet discovered.

To develop a framework of this type, you should therefore try to determine where you want to be, financially speaking, in the future. Are your feelings about money based on factual knowledge or on the influence of others? Are your financial priorities based on social pressures, household needs, or desires for luxury items? How will economic conditions affect your goals and priorities? The purpose of this analysis is to differentiate your needs from your wants. Specific financial goals are vital to financial planning. Others can suggest financial goals for you; however, you must decide which goals to pursue. Your financial goals can range from spending all of your current income to developing an extensive savings and investment program for your future financial security.

Motivation will help you stay focused on achieving your financial goals.

  • Featured Post
  • Financial Planning for Low Income Earners

    “I can’t do financial planning, I don’t have a lot of money”

    Look, I know that you have been through a lot of challenges in your life, and I know that somehow it’s directly or indirectly related to money. If that’s been the case, don’t you think that this is the right time to learn how to manage your finances?

    You see, personal financial planning might sound intimidating to you. You’ve been overwhelmed with the complex calculations, analysis and financial jargons. Remember, having a lot of money is definitely NOT a requirement in financial planning. What we need is a solid framework that can guide to develop the following:

    • Financial Goal Setting
    • Assess your net worth
    • Examine your statement of income and expense
    • Develop your financial plan (Education fund, House, Car, Retirement..etc)
    • Create wealth through Investments (even if you have the slight idea about stocks, bonds, mutual funds… etc.)
    • Review progress
    • Create additional source of income*

    I was stunned when I first tried the process. My paradigm shifted. I realized that by having a clear goal and knowing my financial position, I can motivate myself to change my behavior about money and most of all, about being rich. Let’s slow down here for a moment, I have a question:

    What does being rich mean to you?

    Knowing what “Rich” means to you is important. Otherwise, you might end up mindlessly trying to keep on doing something that you don’t like and unthinkingly trying to keep up with your friends.

    The designation of being “Rich” is different for everyone, and money is just a small part of being rich. Like Royce for example, a former housemate of mine who loves travelling. He once told me that his goal in life is to travel to different places- local and abroad. JP loves eating out and singing at KTV bars where one night might cost him P5,000. Chinny loves joining marathon runs with his wife. All of my friends value different things. I consider myself rich now that I can do these simple things:

    • Help my parents with their retirement, so they can stop working anytime they want to.
    • Have more time on doing the things that I really love
    • Spend on the things that I love doing (e.q. spent lots of money on seminars and trainings- I love learning, but don’t buy a fancy car)
    • Help my family and friends with their financial decisions.
    • Spend more time with my loved ones.

    Before you go further, I encourage you to set your goals today. Why do you want to be rich? What do you want to do with your wealth?

    Business Puzzle

    Is Your Business Suffering From a Lack of Strategy?

    Business Puzzle

    A group of corporate executives in expensive suits, gathered around a conference table, focused on watching a PowerPoint presentation with complex diagrams…

    Entrepreneurs however, tend to have a different life, everything is more immediate. No one is paying them fat salaries to attend meetings and produce reports. They don’t have a time to think about grand theories and long-term planning. Many of them live a month to month and depend on immediate cash flow.

    They need practical, effective tactics that are going to get them more customers, build client lists, move inventories, and generate new ideas that will push them a little closer towards their goals.

    Unfortunately, something important is often lost in this relentless drive to take action and focus on immediate results. What is actually lost is the REAL strategy that will drive the business towards its goals. It’s not easy because it involves a lot of abstract concepts that can’t be easily forced into a set of processes.

    Entrepreneurs always think… “Is it worth it?”

    I say “Yes”.

    If you want to create a real competitive advantage for your business, you need a strategy.

    If you want to build assets in your business, the kind of assets that will work for you to create another asset, year after year, then you need a strategy.

    If you want to move beyond imitating your competitors’ cleverness and want to develop and innovate in your niche, you definitely need a strategy.


    What’s The Greatest Motivator Behind Every Sale?

    Extraordinary benefits?

    Unbelievable offer and bonuses?

    Unique selling proposition?


    When you put your sales techniques aside, it all comes down to one thing and that is TRUST.

    That’s right folks. I used to be a ghost copywriter and came across with a lot of sales letters with unbelievable sales pitch. I won’t be specific here but I hope you already know what I mean. According to the book “The Death of the Salesletter”, Michael Foirtin talks about how “trust” is lost in today’s’ society.

    With crappy infomercials, computer viruses and endless barrage of spam emails, you cannot blame people for beingskeptical… the highest altitude in history. Without trust in a sale, you’re doomed. You can kiss you sale goodbye if you set-off their BS radar. Today’s online and offline world, it’s more about giving the “real deal” instead of offering an “unbelievable deal”.


    “What makes someone trustworthy?”

    The greater part of having copywriting techniques are nothing more than displaying personal qualities that are related to trust. Here are the examples:

    • Personal Story in your sales copy – The seller shows how he struggled to get from point A to point B… so bascially it gives you a feeling that you know the seller, thus cretin rapport and trust.
    • Testimonials and credibility – If other people wrote a good testimonial about the seller’s product, it only means one thing… they trust the product.
    • Give more bonuses – Nothing to do with greed. It’s more on being generous.
    • Guarantees – If the product doesn’t work, the buyer can return it. The buyer trusts the seller that the product works.
    • Passionate seller – We believe people who are passionate and 100% confident in their products. . Why? Because someone can’t be passionate without truly caring about someone or something.

    It’s been a blast learning these things on a gloomy Sunday afternoon.

    Stay tuned and subscribe to our facebook page to keep you updated.


    What Is Learning?


    From Wyatt Woodsmall’s standpoint, an NLP Guru, learning occurs when your behavior changes. Learning is a process we go through from first hear­ing a concept all the way through to applying it. The biggest mistake that can be made when digest­ing information is telling yourself: “I Already Know That”. This invalidates the information going to your brain because it’s just something that you know in your head. You need to apply what you have learned.

    As T Harv Eker says “You don’t know something until you are living it” which ties in nicely with Woodsmall’s definition above. Try catching that voice in your head saying “I Already Know That”, it will greatly enhance the learning process and open your mind to seeing things in new ways you wouldn’t have otherwise. There is however, a big difference between understanding something and learning something.

    “Understanding”, according to Peter Ouspensky’s book “The Psychology of Man’s Possible Evolu­tion”, only occurs when you can clearly see how a smaller concept or problem fits into and connects with the big overall picture and the consequences of that connection. This is systems thinking in it’s truest form and when you get this clear picture of how it all the tidbits of info fit together, and it becomes clear in your head, it makes the actual application part a lot easier.

    A point to make here is that we don’t understand something the first time we hear it. In fact we need to hear a concept many times from many different perspectives before we can make sense of it. Then it’s just a case of apply & test, apply & test.

    To summarize, learning is a step by step process. We start by digesting the information, understand­ing the individual pieces and how they all fit to­gether and then we apply that knowledge. Only then can we truly learn something.



    Photo from rjseg1