Getting into debt is much easier than getting out of debt, especially as it continues to build up with what seems like no end in sight. You aren’t destined to be in debt forever. Be proactive and take these easy steps to get yourself out from under the mountain of debt once and for all.
Take an inventory
Take some time to sit down and organize your debt. If it gets too bad, you might not even open your bills to look at the balance due, or glance at and pay the minimum. You can’t create a plan without first knowing exactly how much and who you owe. Create a list of all your debts and their balances to get a full picture of what you need to conquer to get out of debt.
Organize your debts
All debt is not created equal. Some debt, such as your mortgage, is paid before credit cards if you’ve fallen behind. Examine the interest rate on your debts. Some people prefer to pay off debts with the highest interest rate first, while others find that it’s more effective for them to pay the account with the lowest balance and then work on those with higher balances. It saves money to pay the debts with the highest interest rates off first, but some people like to focus on smaller goals and celebrate victories as they pay off their accounts.
Create a budget
Know exactly how much money is coming in and how much you need to pay out. Create a list of everything including your housing, utilities, food, gas, clothing, phone, and anything else you have to pay. See where you can cut down, such as eating out less, combining trips to cut down on fuel usage, or eliminating your paid television subscription in favor of free channels over an antenna. Every extra dollar you can cut from something else can go towards reducing debt.
Avoid falling victim to a credit counseling or repair service. They cost money and do exactly what you can do on your own for free. There is no quick fix to getting rid of debt. It might be tempting, but avoid payday loans as an option. You’ll get money quick, but at an astronomical interest rate and they’re very risky. Payday loans put you at risk for losing a large sum of income if something happens and you’re unable to pay back what you borrowed. It only adds to your debt. You might want to consider a title loan. Try looking into Florence title loans for a less risky solution.
As you pay your debts off, put the amount of the payment on the debt you paid off towards your next highest debt. If you paid off a credit card with a payment of $75/month, take that $75 and put it on another credit card or account to pay those off faster. Continue to follow this method until you pay down on your debt. Take any unexpected income, such as bonuses or overtime, and apply that to your debt too. You’ll save money as you pay your debts off sooner because you won’t incur interest on the balance.
Stop ignoring your bills and take charge to get yourself out of debt. Create a plan, adjust it as needed, and discipline yourself to follow the plan to get and stay out of debt.