Being in debt can cause unwanted stress and worry. You’ll be forced to live paycheck to paycheck as you struggle to keep up with current bills while paying what you can on old expenses. Your credit score can take a hit as more creditors inform credit bureaus of your neglect of responsibility. Companies promising to help you get out of debt quickly begin to sound like a viable option. Even thoughts of filing bankruptcy creep into your psyche as you feel a sense of helplessness. Before you give in, remember, hope is not lost. With some effort on your part, you can reduce your debt yourself.
Live on a Budget
By creating a budget to live on, you will well on your way to reducing your debt. A budget allows you to gain control over your finances. You will be able to see where your money goes and adjust expenses in order to make more cash available to pay down debt. Cut back where you can and funnel the excess funds towards past due obligations. With a little discipline, you’ll be well on your way to improving your credit standing.
Use Cash More
Living on a budget is made easier if you incorporate the use of cash more often. With cash, you’ll have a tangible limit of what you can spend. Simply determine how much you need to spend in a week. Only use that amount of cash for your purchases. Once you run out of cash, do not get anymore for that week. If you still have a few days left in the week to go and you run out of cash, that may be tough, but endure. If you have cash left over at the end of the week, either rollover the funds to the next week or save it. If you save the change, you will eventually accumulate enough to make another payment towards reducing your debt.
Another way to free up some money to reduce your debt is by living frugally. Clip coupons for groceries. If you don’t have any coupons, simply buy off-brand products. Also, be mindful of other home expenses. Turn off lights in rooms no one is in when at home. Shop at second hand and dollars stores to buy clothing and other useful household items. And make sure to eat out less. You’ll be reducing how much you spend to acquire necessities, freeing up more cash to reduce your debt.
Pay More Than the Minimum
Credit card companies usually require their customers to pay a minimum balance towards the total amount of debt due. It makes things easier for customers to pay the minimum, but it is not the best payment method. Simply paying the minimum balance binds you to the obligation for a lot longer than necessary. Sure you’re making the payments, but only a small amount of the payment is applied towards the principle balance. Paying more than the minimum balance helps you to pay down the debt faster.
Increase Your Income
Last, but not least, increasing your income goes a long way towards helping you to reduce your debt. Working a part-time job to bring in some supplemental income is a great place to start. Also, if you have a hobby that you love, look to possibly starting a part-time business. Anyway you can think of to increase your income would help out immensely. You could even write articles for Helium.
Having a plan of action to reducing your debt is one thing. Following that plan strictly will lead to success. Look at your financial life for anywhere you can save, earn, and make the most out of every dollar. It will take discipline, desire, and, most of all, patience. With time and dedication, you will begin to see the light at the end of the financial tunnel of debt.