The holiday season is just about behind us and what lies ahead for many is the mounting piles of bills left over from the spending- and over spending- that frequently goes on this time of year. If you find yourself faced with mounting debt there are things you can- and should- start doing to help get out of debt.
More and more Americans are faced with rising debt loads. We are carrying too much credit card debt and we keep buying. The first step is, of course, admitting that you have a problem. Realize and accept that you have a problem. That is what must happen before you can begin to create a plan that will help you fix the problem. It took you a long time to incur the debt and it wont go away over night, either.
Stop Using Credit
Put your cards away. Stop using them. That only makes an already large problem even bigger. Pick up the phone and call your credit card companies and ask them to lower your interest rate. Many may say no but some may very well say yes, especially if you have been a customer with them for some time and have made your payments on time. Tally up all the debt you owe and look at the interest rates and balances.
Some experts suggest paying the balances that have the highest interest rates first. Some experts say pay off the smaller balances first. That leads to a level of success and makes you more inclined to keep to your new path. Whichever path you choose, stick to it and track your progress.
Create A Budget
The best way to ensure that you are living on less than what you make is to create a budget and stick to it. It doesn’t help to have the best budget in the world if you never follow it. Track your income and expenditures on a daily basis. Focus your attention on what you spend your money on and if it something you truly need more than you need to be out of debt.
Being in debt makes you captive to those to whom you owe money. In essence, they own your life. Isn’t it time you take it back? Look at your income. If possible, find additional ways to bring income in and focus those dollars to paying off your debt. Let your budget- a zero based budget works best, be a road map to your money. The budget will show you where every dime of your income goes.
Cut Back on Expenses
During this period of debt repayment, only spend on those items that are necessities. Now is not the time for frivolity– no matter how much fun it might be. Your goal here is to rid yourself of the debt you owe thereby creating a life of more freedom. There are things you can do without; there are compromises you can make. You have to decide which is more important to you and your family.
One way to prevent the use of credit cards is to start an emergency fund. Many experts say this should have around $1,000. It exists to protect you in the event of emergency. It is to help you when those unexpected situations arise so that you are not tempted to use your credit card and raise your debt amount. Remember that if you do have to tap into the emergency fund, you should replenish it as soon as you can to continue the prevention of credit card usage. Once you paid off your debt you can then begin adding more to the emergency fund as an additional savings account.
- Stock Carnival Ecstasy – November 24, 2011 (fastswings.blogspot.com)