It is oh, so easy to get into debt, and oh, so hard to get out of it. If you are getting deeper and deeper into financial trouble, this article will help you straighten things out.
The Debt Demon
If only paying off debt was as easy as going shopping, we would all be debt-free. Unfortunately, it is very easy to rack up a few thousand dollars of debt in a few trips to the mall, but it can take years – or even decades – to pay it all back.
We live in a society that considers debt to be normal, so it’s no surprise that we are all drowning in loans, overdrafts and unpaid balances. From the day you take on your first student loan, you are being trained to be a good, debt-laden consumer…just the way the banks like it.
The Debt Spiral
Being in debt is bad enough, but it is infinitely worse when the amount you owe keeps spiraling upwards. This can be a real problem if you rely on high-interest credit to get you through the month. When you run out of money before the end of the month, it is really tempting to go for that payday loan. And when you need something in a hurry but don’t have the cash, it is so easy to pull out your credit card.
But the convenience in the short term comes with a hefty price tag. With both payday loans and credit cards, the interest rates are high, and the problem gets worse and worse if you don’t clear the payments on time. The amount you owe continues to escalate, even if you aren’t spending another cent.
So get your money under control. Stop the debt spiral before it bankrupts you. Although this might not sound easy, it can be done. Here is some proven advice to help you make it.
Stop Spending…Right Now!
Yes, I know that sounds obvious, but very often people tend to do the exact opposite. When they realize how much debt they are in, they figure, ‘oh well, I am in deep trouble already, so another thousand dollars of debt won’t make much difference.’
That’s completely the wrong attitude! If you want to stop your debt spiraling out of control, the first thing you have to do is crack down on your spending. Don’t buy anything else on credit. You have to learn to live within your means – like everybody did before the age of the credit card.
Tackle Your Most Expensive Debt
As we have already discussed, it is usually credit card debt and payday loan debt that causes things to spiral into the stratosphere. So if you have either – or both – of those kinds of debts, you need to tackle them head on. Just paying the minimum balance each month is nowhere near good enough. You need to take drastic action to cut these debts down to size.
Can you live without your second car? I bet you can, so sell it – and use the money to pay down your loans. Get a second-hand bicycle instead…the exercise will do you good, anyway. What about a weekend job? Any work you can get – even if it is just flipping burgers – will generate extra cash to pay down your expensive debt with.
Cut Your Recurring Expenses
That cable package that costs you $50 a month might seems a manageable amount. But don’t forget that this works out at $600 a year, every year. Is it worth it just to watch some re-runs of Seinfeld? Recurring expenses take a big bite out of your money, and the pain never stops. Every month there is another chunk of money gone.
So get out your bank statements and credit card statements and go through all the recurring payments. Cut out any that aren’t absolutely essential. You will make huge annual savings if you do this effectively.
Re-think Your Lifestyle
We all want to live well, but you will never enjoy life to the full with spiraling debt hanging over head. So you need to get clinical and re-think the way you live your life. Are you spending money on restaurant meals every week? Time to cut those out and eat at home.
Instead of paying to go to the movies, watch a movie at home. And maybe that vacation you were planning should be postponed for the time being – you have more important things to worry about.
Set a Daily Cash Budget
Sit down and do the math on your budget, and work out how much you can reasonably afford to spend as a daily budget for out-of-pocket expenses. Then draw that amount in cash, and take it with you when you go out – leaving your credit and debit cards at home. Learn to live solely on that daily cash budget, so you know for sure you are not over-spending.
Renegotiate Your Cheaper Loans
As we have discussed, your priority is to clear the most expensive debt. So one option is to refinance cheaper debt, such as your mortgage by extending the term it runs for. Although this is far from ideal in most circumstances, it is a sensible option if your current debt is threatening to send you into bankruptcy.
However, only do this is if the money you save on mortgage repayments each month then goes directly towards paying off your expensive debt. Otherwise, you will just be getting even deeper into trouble.
Ask for Help
The good news is that you don’t have to do all this on your own. There are experts in dealing with these kinds of problems who can give you sound advice based on years’ of experience. They can give you clear advice on what your options are, and recommend the best strategy for your personal circumstances.
A great way to solve your financial problems is to contact Accredited Debt Relief. They specialize in helping people who are struggling with accumulating credit card debt. You may be surprised to find that you have more options than you think, and that it is possible to create a plan that will get your life back on track.
Don’t Bury Your Head in the Sand
The most important thing to remember is that you must act. The worst thing you can do is struggle along, hoping that some kind of miracle solution is going to save you. It won’t. You almost certainly won’t win the lottery, and you don’t have a long-lost relative who is going to leave you thousands in their will.
It’s down to you.
So quit burying your head in the sand and face the reality. Start by getting helpful advice today, and begin getting your debt under control. Believe me, you will feel so much better when you do.