Getting into debt that you struggle to manage can be very easy. It is a slippery slope that builds up over time and before you know it you can be in a difficult financial position. There is not one method of getting out of debt that will suit everyone. With so many different types of debt from lines of credit to credit cards, you will need to take a hard look at your spending and make a plan that works for you.
Feel free to use some, all or just one of the tips below to help you get out of debt. The best time to start getting your finances in order is now.
1. Don’t get into any more debt
If you are already concerned about the amount of debt that you’re in, you should definitely not get into anymore. This can be difficult as it may be the only way to keep up the lifestyle that you’re used to, but this is an absolute must if you are looking to get your financial future back on track.
2. Pay more than the minimums
The minimum payment on each of your debts will not get you to pay them off anytime soon. In fact, if you stick to the minimum, you will probably have paid back a lot more than you originally borrowed by the time you have paid it all off.
3. Have some emergency money
It may seem a little strange for you to have money sitting idle when you have debts but you may need to have some cash to hand to take care of something that can’t wait such as car maintenance or a higher than average utility bill. Having this money available to handle any surprises will help you to avoid picking up additional debt.
4. One debt at a time
The best way to implement debt relief it to maintain the minimum payments on all of them, then choose one debt and clear that as soon as possible. The way you can check them off one by one and make real progress in a short amount of time. Once you have one debt fully paid off move onto the next one. You will notice that the amount that you are paying to your debts is increasing rapidly with each debt you pay off. You can add this to the payment you make each month.
5. Simply ask for a lower interest rate
The higher the interest rate, the longer you will be in debt. By simply calling the company that you owe the money to and explaining your situation and asking if there is anything that they can do you might be pleasantly surprised.
6. Look at your overall budget
If you can trim some money away from other expenses that you don’t need then you can put that money towards the debt. You might be amazed that with a little tighter budgeting you will be able to get rid of your debt much quicker than you expect.
7. Get credit counselling
This can be very helpful and can help with what seems like an impossible mountain to climb. Credit counselling will be able to give you the help that you need to make a plan that suits your exact situation. They will be able to put together a step by step program that will allow you to see the light at the end of the tunnel. It will also teach you the best practices that you need to follow to stop yourself from getting back into debt once you are free from it.