How To Get Out Of Debt
If you’re an individual that has some type of debt on your name, which in this day in age the reality is that you probably have, you know the struggle of maintaining a proper lifestyle without stress when there’s a big number hanging over your head like a thunderstorm each and every month.
What’s worse is, most people accumulate debt that they can’t pay back, and this often leads to them receiving their paycheck at the end of a month that allows them to pay their bills and expenses, leaving them with no money to save. The thing with debt is, it usually only gets worse unless you’ve got some sort of plan of action set in place to get rid of it.
The two most common types of debt around the world is usually due to student loans or credit cards, that are granted to individuals and maxed out quickly.
Rule number one: Just because you have a credit card doesn’t mean you should use it.
Steps for getting out of debt
- Be informed about how much debt you actually have.
It all comes down to guilt. Many people ignore to look at monthly statements or calculate their debt overall. This is usually due to excessive spending and not wanting to face the matter head-on. Most people swipe for payments at the end of the month without even checking their account. Taking it one step further, when in debt, people also tend to purchase on their credit cards as soon as they’ve paid it off, which is the wrong way to go if you’re trying to get out of debt. When you make your next set of payments, be sure to restrict yourself from not spending again and start calculating how long it will take to pay your debt off.
- Pay one thing at a time
Now that you know what needs to be paid, as well as the total amount, why not start at one point and work your way to the end? Since in most cases you have to make payments monthly for all your account or expenses, pay a little more each month on the bill you’d like to pay off quickly.
- Eliminate your options
Don’t buy anything more on credit. Unless you need your credit cards to pay off your account, cut them up and throw them away. This might seem excessive to you, but every once and a while, detoxing your wallet is a good idea. You don’t want to get into the same mess again. Another option to consider is to freeze your credit.
- Negotiate lower interest rates and pay off your debt
Usually, the more you have to pay back, the higher the interest rate as you’re paying your debt back over a period of time. You can simply call your credit provider and negotiate lower rates.
It’s simpler than people think. After negotiating lower rates, you could use that money to pay a higher amount each month. If that’s too little, you could use a hidden income, or perhaps try and earn more money.
The point is, getting out of debt is not impossible and at the end of the day, planning will be your best friend.
Get debt review and counselling from Credit Matters.