Ending The Cycle Of Debt

It seems like almost everyone is drowning in debt. Student loans, bad purchases, poor money management, job loss, and just regular necessary day to day expenditures are some causes of debt. Of course, it is sometimes inevitable to be in debt. Especially after purchasing a house or a new vehicle, we put ourselves in what we can call necessary debt. To manage these necessary debts, people make monthly or bi-monthly payments. For even thousands of dollars of unnecessary debt incurred, there is hope. You can get out of it. It will take determination and a lot of effort to be able to do it but life without debt is possible. Many have conquered the overwhelming mountain of debt they had by doing the following:

1. Acknowledge the debt you have and why you have it. Get your head out of the sand. It’s easy to avoid looking at what the ugly debt amounts to. But if you want to move on and get your debt problems resolved, it’s best to know the full amount of what you have to pay back. Look at your statements online. If you’re married, it’s best if both partners have an equal active role in looking after financial matters. Write down the reasons why you’re in the situation you’re in. Be honest. Looking at these reasons will help you to avoid making the same mistakes and will hopefully help you to manage the way you spend your money better afterwards.

2. Get a job. If you’re unemployed, don’t be afraid to do jobs you might not enjoy like cleaning. Cleaning houses or even windows for businesses actually pays a lot. It also requires little in the way of materials. Jobs that people might frown upon like a grocery store worker can help you get back on your feet until you get that dream job you want. Don’t be picky about work especially when you need a job and have to pay off debt. Don’t just stick to one job. If you want to have a lot of income, you might have to work two jobs until you’re able to pay off all your debts. Make sure you have enough time for family and for yourself at least one or two days a week or else you’ll burn out. Stick to a good schedule.

3. Consolidate your debt. If you have debt on several different credit cards, what you can do is get rid of most of your credit cards and stick to one that has the best interest rate for you. Pay off the rest of your credit cards with the one card and get rid of them once they’re paid off. It might be best to put all of your debt in your line of credit your bank gives you and pay that monthly. If you do that, you’re saving yourself from having to pay interest fees for all your different credit cards. It’s also easier to pay off one lump sum of debt than paying off many different credit cards.

4. Make a plan. With the income you’ll be making, see how much of it you can use to pay off debts after necessary expenses like groceries and bill payments. If you’re $20,000 in debt and want to pay it off in two years, all you have to pay each month is $833.33 to be able to get out of debt. Cut back on unnecessary items like cable TV and buying new clothes. Go to the library for free entertainment and shop at second-hand stores for gently used clothes. Cook at home. Plan your meals so you won’t buy random things at the store and shop every few days not every week to prevent wastage. If it’s available in your town or city, shop for groceries online and have it delivered to you to save time and save you from buying unnecessary items. Make a monthly and yearly budget for yourself and do your best to stick to it. There are many samples online or even applications you can download to help you make a budget and stick to it.

5. Save. When you do get out of debt, what you can do with the extra money you’re making is save. You can put some money in an emergency fund and the rest in a savings account. If ever something happens, you’re prepared and you won’t have to borrow money or use the credit card too much.