Read on for some tips on how to put your financial life back on track by getting rid of your debt.
1. Stop adding to your debt. Cut up all credit cards except one. Include gas cards and department store cards. Retain one credit card for emergencies. Do not close your accounts because this can hurt your credit score.
2. Think about your spending habits. If you are an impulse shopper, force yourself to take some time before you make a purchase. Consider whether you really need the item you want to buy.
3. Make a list of everything you owe, and note the interest rates. Give priority to the most important debt. The next bills to attack are those carrying the highest interest rates. Concentrate on getting rid of debt that carries interest rates in the double digits.
4. Always pay more than the minimum amount required each month. Making the minimum payment can drag out the debt repayment process for years.
5. Sort your spending into categories. Distinguish between things you must have and things you would like to have. Cut back on non-essential spending, and apply that money to your debt.
6. Look for ways to reduce your spending on essentials. Shop for generic brands at the grocery store. Take advantage of sales to stock up on items you need. Trim your water and electricity use. Savings should be used to further reduce debt.
7. Simplify. Most of us can live more frugally. Cutting expenditures on luxuries may be difficult now, but future freedom from the worries of debt will make the sacrifice worthwhile.
8. Look for extra income. Find a part-time job, or turn a hobby into a money-making opportunity. Apply the proceeds to your debt.
9. Tell your friends and family what you are doing. Moral support can help keep you on track as you work to set your financial house in order.
Image Credit: Brad_Chaffee
Written By: Shannon R