8 steps to ensure you have money for debt
Didn’t keep a check on your finances and got into debt? The next step would be to ensure you can make those monthly payments. You don’t want debt to accumulate and let it become a burden in the future. Preemptive action will keep your future stress free. These are the actions you can take to be able to pay of debt.
List your liabilities
Goes a long way to know what you’re spending on. Also enables you to keep your spending to a minimum. Make a list of your expenses; go through them and decide what you can do without.
Make a balance sheet
Your monthly expenditure should be accounted for whether on paper or a spreadsheet. Keeping track of your expenses on a balance sheet will allow you to spend wisely.
Don’t tap into your savings
May seem like a good idea as it frees you from debt quickly. However, compromising your nest egg early can endanger your future. Unforeseen circumstances that get you into financial trouble may arise and you will not have any backup.
Make aggressive lifestyle changes
Tightly budget your groceries. Cut down on all unnecessary expenditures. Avoid services which you can do yourself. Live below your means. These go a long way in debt reduction.
Spend more than the minimum
Being in debt is like being in quicksand, the longer you’re in it the harder it is to get out. Paying the minimum amount keeping more cash on hand seems to make sense. However, your debt may get larger and interest rates higher as time passes. Remember, the idea is to get out of debt as fast as possible.
Negotiate interest rates
The interest rates on your debt can be negotiated. You only need to try and find out. Being competitive in nature, the credit industry is bound to offer schemes that reduce payments, to keep customers. Stay updated on such schemes. Try calling up card companies, telling them the rates of interest offered by the competition and see the magic happen.
Got multiple debts?
Having multiple debt settlements to be paid can be hard on your monthly income. Consolidate your debts into a single monthly payment. Negotiate your debt consolidation plan so that the payment does not exceed more than 25% of your salary.
Credit companies offer special incentives to customers with a high credit score. Credit rebuilding allows you to increase your credit score so that you can get in on such offers. Don’t let a bad credit score keep you from getting rid of debt.
These tips will make sure you get out of debt fast. Debt can have a paralyzing effect if not rid of quickly. We wish you a debt free future!