Debt. It’s a word everyone hates. It doesn’t even sound like a nice word. But if you’re drowning in debt, it’s a word that is on your mind daily. More than likely you didn’t get into debt quickly, getting out of debt may seem impossible, but you can get out of debt. It may be painful for awhile but the long term goal will be worth it.
Finding out how far in debt you are
This is one of the most unpleasant tasks to getting out of debt. Many who are in debt have no idea what their total debt is. They put bills aside knowing they can’t pay them pretending like they don’t exist. But to get out of debt, you have to know how far into debt you are. Dig up all the bills write down each one that you have the monthly payment and the total amount due for each one. Now this is the hard reality, totaling up everything. You do need to know the total.
Figuring out income
Pull out your pay stubs, include other income that you have coming in every month. Total up everything that you have coming in. Subtract the debt from the income see if you’re in the negative. Hopefully you’re not in the negative, but if you are, you will have to make some drastic changes quickly.
Budgets, this is a word that is worse then the debt word. But you need to know where you money is going. For the next few weeks write down everything you spend money on. Don’t leave out anything. You need to know where you are spending every last penny. Once you figure out where your money is going you will find out that you have money being spent on things you can do without. You need to be able to get your bills less than your income. This means if you have to take a part time job or cut back shopping for clothes, or eating out for a few months, you will know exactly what needs to be done.
Goodbye Credit cards
Yes, getting rid of credit cards till you get out of debt is one thing that you will have to do. You may want to keep a (one) credit card in case of emergency, but do not use that for weekly bills, or things that are not a necessity.
Goodbye Budget Busters
Do you subscribe to Cable Television? Do you have all the channels, while many people do need to have the basic channels to get any reception, you don’t need digital cable, with the Premium channels. Drop down to the basic channels, which is usually under $10.00 a month. You will still have good reception, but without the higher bill. Use the money you save on your cable bill to pay towards another bill.
Do you have coffee out everyday? Do you eat lunch out everyday? You can make your lunch from home saving that lunch money everyday. Eating out with friends daily will use money that you can’t afford to spend. Bring your lunch from home. Go grocery shopping with a list, and stick to the list. Do not spend anything that isn’t in your budget.
Paying down bills
You want to pay on all your bills every month but try to pay off the highest interest bills quicker if possible. Pay at least the minimum monthly amount on all bills. Once you get a bill paid off, use that money towards another bill.
Finding extra money
Ebay unused items from your home use that money to pay your bills. Take a part time job for a few months using that money to pay down your bills. Trade your car in for a cheaper model, one with better gas mileage. Have a yard sale to bring in money to reduce the debt.
Designing a budget is easy sticking to the budget is the hard part. If you have a partner you both need to sit to discuss the budget and work together to get your debt under control. Living without debt except for mortgage is a wonderful feeling you will be under less stress. Once you get your debt under control, and know that you are living within your means, your life will become less stressful. While getting out of debt isn’t going to be easy. It is worth it to be debt-free and saving money for yourself then paying interest to other businesses.