Skip to main content

Top Ten Tips for Getting Yourself Out of Debt


Unchecked debt can snowball, and before you know it, it can feel like there’s no way out. Here are a few tips to get you started on regaining control of your finances:

1. Get motivated.

Setting yourself an end goal and reminding yourself of it every day can help and give you that extra push. Promise yourself a reward each time you reach a milestone, such as paying off credit card debt or sticking below your budget. If you feel negative all the time it can feel like a losing battle and you’ll fail before you even start.



2. Work out how much you actually owe.

It’s a common mistake to think that you only owe what you borrowed. That $1,000 on your credit card can soon double if left to accumulate interest. Make sure that interest rates for each creditor are accounted for: it will probably shock you into taking action.

3. Understand your debts.

As well as thinking about the interest rates and factoring these in to your budget, you need to understand all of the terms and conditions on any contracts and credit agreements that you have. All of your creditors may have different rates and rules so this can sometimes be quite complicated. A loan to consolidate debt can reduce your monthly payments and give you fewer creditors to worry about.

4. Know your options.

The best option for you can take some research but there are many ways to get out of debt, including consolidation loans, a moratorium, a debt agreement or bankruptcy.

5. Negotiate with your creditors.
If you don’t ask, you don’t get - so try asking for a lower interest rate or negotiating lower, more manageable repayments. Often, some smaller level of repayment is better than no repayment at all, and many creditors favour this option. If they say no, re-evaluate - there’s nothing lost.

6. Prioritise your debts.

Pay off the most important debts with the highest levels of interest or for the greatest amounts before focusing on smaller loans and lower rates.

7. Set a realistic budget.

Log every penny you spend and it will help you realise where you are spending unnecessary cash. However, make sure that you budget for emergencies and don’t leave yourself short each month or it will drive you back to the money lenders.

8. Use cash instead of credit cards.

Go to the ATM once a week, only take the cash you have budgeted for and leave your bank cards at home. Physically seeing the cash fly out of your wallet will make you realise how much you’re spending and what you’re spending it on. It will also give you a good idea of where you can make cuts. Credit cards aren’t money - if you don’t have the cash in your wallet, you can’t afford it.

9. Take action against those unnecessary expenditures.

Your log of expenses and those disappearing dollars will soon make you rethink that fancy restaurant reservation. A little expense here and there will soon add up – know when to say no.

10. Don’t be too hard on yourself.

If you give yourself an unrealistic budget and change your lifestyle completely, the chances of you succeeding are pretty slim. Make sure you have room for a treat every now and then to keep you motivated: depriving yourself of everything you love is a recipe for disaster - especially when combined with the existing stress of debt.

Comments

Popular posts from this blog

Low interest credit cards - how to make them work for you

Credit cards are borrowing instruments, unlike debit cards where you already have the money. Banks are there to make money too. Just like high street stores, they hope to maximise their profits within the rules. So it’s important to understand the basics and find a credit card that’s right for you – you can compare low APR credit cards here . Now you know the rules, let’s find out how to play the game. The financial services industry charges interest on the money that it lends out. Let us assume you borrow £100 on your credit card and keep it for exactly one year before you pay it back. For the purposes of this article, we will assume your loan attracts 8% interest per year, which is the Annual Percentage Rate, or APR for that particular transaction. Practical example

Why it’s important to save for retirement

While retirement may seem far off in the distance for some, financial experts say you’re never too young to begin saving.  In fact, the earlier you calculate your retirement needs and start building your nest egg, the easier it will be to create a viable plan for the future. Many experts advise you begin saving a percentage of your income for retirement as soon as possible, no matter how little the contribution may be, as it’s possible the Social Security benefits millions of people currently depend on may be in jeopardy.

How does a Prepaid Credit Card work?

Can They Really Be a Solution to Avoiding Credit Card Debt? When it comes to plastic, there are a lot of choices out there. Not only do you have the choice of credit card , debit card, or prepaid credit card, but you also get to decide which financial company you want to use as your card provider. Credit cards and debit cards are both risky. Credit cards can help put you deeper into debt, while debit cards give thieves and collectors access to your entire bank account. A growing number of people are finding that prepaid credit cards are becoming the best option. What Are Prepaid Credit Cards? Prepaid credit cards look and act just like a credit or debit card, except you put the money on the card before you make any purchases. You are only allowed to spend as much money as you have pre-loaded on the card, which means that you are not at risk of going into credit card debt from overspending. These cards also keep your money safe, because thieves will be limited to the amount that is on t

What are the Consequences of Overspending in Life?

How overspending can ruin your financial life? With today’s expenses and their prices, it can be very hard not to overspend. Still, that isn’t an excuse to stray out of your budget. You know why? It is because overspending can only lead to more problems than you think. Overspending can affect your whole life. With all the possible consequences, it may jump from one problem to another. Unpaid bills All the excessive shopping with your credit card can cause steep bills at the end of the month. If you keep on using your credit but don’t have enough money to pay for it in the end, then you’re surely in for a huge financial disaster. This will turn out to be missed payments, and missed payments will ruin your credit report. Missing out on payments will get your credit report marked for 7 years or more. And you can’t get rid of them by finishing them off. Credit report Overspending can cause a chain reaction of events. Once you get your bills due to overspending, it’s possible for you to mi

How to Make Your Title Loans Safe and Sound

Although title loans are tagged as risky, innumerable folks still use them for fulfilling their different financial obligations. Therefore, such loans are not completely bad because their significant use despite the risk factor says a lot of their pros. This makes it vital to discuss how these loans should be used so that the risk factor can be minimized up to a great extent. For those who are not aware of, the risk of title loans crop up in the form of consequences when you fail to pay back the loan. With such a failure, you are surely going to lose your car as well as decrease your credit score further.

Money Moves: Imagine Playing Your Financial Life like a Chess Game

To say chess is a popular game would be a gross understatement. Chess, for at least 1500 years, has been considered to be not just a game, but a true test of intellect and character. One can learn a great many things about chess that can be applied to one’s life, not the least of which is one’s personal finance. Chess is a game that requires patience, foresight, and an ability to understand your opponent. Much like your personal finance, these qualities are required for you to come out on top in the end. Here are a few things you can take away from playing chess and use to improve your financial life:

The Financial Implications of Wills and Probate

Despite the stress and sadness that surrounds the passing of a person, death is synonymous with money. If the deceased has left behind anything of value, the family of that person is forced to deal with the access and distribution of such assets. This may entail the payment of inheritance tax, analysis of the will, and the application for probate. Probate is basically the process involved in establishing who can distribute the assets tied up in a will. In most cases, the deceased should have named an executor in their will – this is the person responsible for obtaining probate and dealing with any other financial implications of the death. The amount payable in inheritance tax is declared by the government or state, and the desired distribution of any monies and other assets should be clearly laid out in the will. However, the cost of obtaining probate is a further financial implication of death and one that can vary wildly should it not be carefully monitored. Whilst probate is