Simple Steps For Becoming Debt Free
Taking account of your financial situation is the first step in heading in the right direction. There are varied options on the web to help you with finding the exact position of your finances. Enter all your income and breakdown all your expenses as you incur them during the month. Look closely at your bills and account for how much the institution is charging you for fees and interest. This will give you a good picture of where and how much of your money is going into various activities.
Look through your expenses and objectively decide which expenses are essential and which ones have to be paid.
See what the interest rate is on your credit cards. If you have more than one card, it may make sense to go to your bank and see if they will consolidate your debt. This is only worthwhile if your new loan is lower than your previous loans and that you can afford the new payments. If this is not feasible, call your credit card company and tell them about your situation. Discuss with them the option of lowering rates or switching over to a credit card with lower interest rates. Alternatively, shifting your credit card balance to a low interest one will also solve the problem but keep in mind that these cards usually only have a 6 or 12 month timeline with the introductory rates. Use this time to pay down your debt and get back on your feet.
We have looked at decreasing your expenses and also lowering your interest payments, which is one side of the coin. The other side is to also increase your income. This will allow you to bring down your debt on two fronts, and speed up the process significantly.
Part time jobs and weekend jobs are available for those who are willing to seek them out and work hard. The pay may not always be the greatest, or close to your normal income level, but some income is better than no income. The extra couple hundred dollars earned in extra pay will bring you that much closer to a more stable financial position.
One thing is for certain, if you are in a poor financial situation, be honest with yourself. Realize the situation for what it is and commit yourself to making it better. Once you are committed, do not approach it with a piecemeal approach. If you have to sell your expensive car so you can have lower payments going forward then do it, making major adjustments and sacrifices at the beginning pay huge dividends down the road as you turn your life around to healthier financial path.
By InvestorGuide Staff
Posted in ...Personal Finance