Getting control of your debt can help you live a happy and fulfilling life.
When you see your paycheck going toward a vacation fund as opposed to a credit card payment, you have an increased level of control over your life.
If you are currently drowning in debt, what are some ways to get that debt under control?
There are some things that you can start doing right away to help you stop sending all of your hard earned money to credit card companies each month.
1) Use Personal Checks Instead Of Cash Or Credit
Using a check instead of cash allows you to set a spending limit for yourself whenever you go out. You should write one check for the grocery store, another check for when you go to the mall and another to deal with other bills. Checks for personal use can be ordered quickly online.
2) Budget Wisely
Make a budget and stick to it. The first step to paying down your debt is to control your current spending. Create a budget every six months and review it at least once a month to ensure that you are staying on track.
3) Learn Where You Can Make Spending Cuts
Are you spending money on things that you don’t need? Instead of a two bedroom apartment, why not live in a one bedroom apartment? If you have a car, you may consider selling it or trading it in for something that costs less and uses less gas.
4) Strategically Pay Down Your Debt
You can’t just throw money at your debt. The best way to reduce your debt is to find out which debts will cost the most if you make minimum payments only. Those are the debts to focus on until they have been paid off.
5) Look For Ways To Increase Your Income
Finding a second job, developing a passive income stream online or renting a room in your house are all good ways to find extra income. That extra cash can then be used to pay down your debt or to increase your savings.
6) Don’t Incur Any New Debt
While this seems obvious, many people incur new debt that makes it harder to pay down their current debt. Make sure to cut up the credit cards and avoid making any large purchases unless they can be paid for in cash.
Getting your finances under control should be a top priority. As your debt decreases, your savings will increase and your stress levels will go down dramatically. Therefore, start making a plan right now that will help you regain a level of fiscal sanity in your household.
Some purchase we make aren’t necessities and are more of the ’emotional’ nature. Managing and maintaining your finances can be tricky enough but if you don’t know how to Avoid Emotional Spending then you could have a tough road ahead.
| Written on 10/9/2013 by Anita Ginsburg. |