You have to draw up a personal budget if you want to get on top of your debt.
It might be tedious and difficult to do, but it is important.
A budget will provide a realistic overview of your situation.
You must then take practical steps to make ends meet without the use of credit cards.
1. Stop Using Your Credit Cards
If you must, cut them up or freeze them. At the very least, you should leave them at home.
The goal is making sure that you don’t have access to them until your financial standing has been restored.
2. Cut Non-Essential Expenditure
Lower your expenses to the bare minimum. Keep only what’s essential, at least temporarily.
For instance, you can cancel your cable subscription.
Later, you can reconnect your services once you have a surplus of money once you have repaid your debts.
3. Reduce Essential Expenses
Set a goal to have more money. Shop around for auto insurance to get the best rates. Reduce food waste by making soups using vegetables that aren’t at their freshest. Walk rather than drive whenever possible. Every change is important, no matter how small it might be.
4. Be Aware
People in debt often don’t understand how they found themselves there.
Set a financial goal and be aware of the impact that each expense has on achieving that goal.
Account for all your expenses and know exactly where your money is going. Never leave anything to chance.
Find out more here – What is an attachment of earnings?
5. Grow Your Income
Find ways to grow your income and use the additional funds for debt repayment.
Find a boarder or roommate
Consider selling items that you no longer use… or
Get a second job
Any extra incoming funds will definitely help you make ends meet.
If you follow the 5 tips above, you will definitely be on the right track to balancing your budget.
While this doesn’t guarantee a quick resolution of your problems, you will at least have gained some control over the situation.
Repaying Debts
You have put your expenses in order. It is now time to shift your focus towards paying off your credit card debt.
Keep in mind that the debts are accumulated over several months if not years.
The process for getting out of debt could be just as long. Be patient and stick to the plan.
1. Make the Minimum Payment on All Your Cards
If you have very high debts, it is likely that your payments will cover just the fees.
If that’s the case, your debts won’t reduce, but you will at least have protected your credit rating.
2. Apply Any Surplus Money to Repayment of High Interest Rate Debt
Prioritize debt repayment from the highest interest rate to the lowest.
This approach will help you reduce the monthly fees associated with your debts gradually.
Once you have paid off the first debt completely, move on to the next.
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