Don’t be alarmed by this statement but getting into debt isn’t necessarily a bad thing. It is an inability to manage debt which then spirals out of control that can be catastrophic. Credit cards, loans, and car financing are easy to get hold of nowadays. It is this convenience and very little vetting that enables people to apply for more credit, get into more debt and then spend their lives barely even paying off the interest on their debts each month, let alone touching the capital. However, there are some strategies to employ if you want to get on top of your debt and streamline your finances.
Look At The Big Picture
Think about your incomings and your outgoings as a whole. Set up a budget if you haven’t already got one or adapt the one you already have using a detailed template available from thebalance.com. Ensure you list every single piece of expenditure on there including the newspaper you pick up on a Sunday and the Danish pastries you pick up for the office every Friday. You want to create as accurate a picture of your finances as possible.
Your debt repayments will obviously form a considerable chunk of your outgoings. There are ways in which you can streamline your finances so that you can pay off your debt quicker and in a more manageable way. If you take a look at consolidate.loan, you’ll notice how you could repay up to $10,000 over 36 months with a simple payment of $319 a month. Consolidating your debts into one monthly repayment can make budgeting easier and stop you from falling into the trap of only paying off the interest on your credit card debts.
Cut The Luxuries
Although it can be tough, you need to make some difficult decisions when it comes to spending on things you don’t need. You may want to consider cutting back on your weekly trips to the cinema and cancelling your gym membership might be a wise idea. You won’t need to live frugally forever, but the short-term pain of thrifty living will be worth it as you see your debt diminish.
Time To Save
Even though you may find yourself in a financial pickle, as you begin to trim the debt, you will find that your disposable income increases. This doesn’t mean you should take out another credit card. You shouldn’t take out any more debt until your initial debt is fully cleared. Instead, think about starting a savings account. By putting some of your hard-earned cash away in a rainy day fund, you’ll be revolutionising the way you utilise your money. As you see your nest egg increase, you will be motivated to continue honing your expenditure and put any spare cash into your savings account.
Debt can be a heavy burden to carry especially when you feel like you are struggling to come up for air. However, there are ways you can begin to chip away at the debt, no matter how large it may be. It may take some time, but with commitment and determination you will become debt free and achieve the financial freedom that you have always dreamed of.