Complete Idiots Guide to Getting Out Of Debt

Guide to Getting Out Of Debt

If you are struggling under the yoke of high debt, the last thing you need is a lecture on the merits of timely payments and living within your means. You are probably looking for some straight-forward advice on how to get out of a tight situation. It doesn’t take a lot of brains to get into debt and it doesn’t take a genius to get out of it either. Here are some simple tips to start reducing debt.

Educate Yourself

Understand that you are not the first or last person to be in your position. Lots of people have been and are going through the battle with high debt. There is a lot of information printed, televised, written and blogged on the subject. Look for materials that offer different strategies for you to compare. Try a library or bookstore to get an idea of the many different programs from many experts. Choose a medium that is comfortable enough for you to really dedicate some focus to learning from. Remember, you are looking for information that is right for you, but don’t expect to see yourself in every situation discussed. What you’re looking for is a good understanding of the system and how you can work with it.

Organize Your Bills

Sit down and list all your monthly bills, monthly income and total outstanding debt. This action alone can be all the wake-up call most people need to alter their attitude towards credit and spending habits. You need to realistically see what you’re dealing with before you can formulate a budget. Even if you have to get assistance to make your new financial plan, this is a tool you will need.

Make a Realistic Budget

Evaluate the lists of income and out-go. Don’t forget those monthly living expenses. Cut back where you can. It won’t work to say, “I will spend nothing on entertainment” because when you prohibit yourself, you want it more. Instead make a smaller budget for entertainment and stick to the limit. It’s all about discipline.

Get Rid of High Interest

The reason for establishing a budget is to free up some cash to put towards your outstanding debt. You need to be able to pay more than the minimum monthly payment in order to start shrinking your debts. The interest charges that accumulate every month are a big part of debt becoming unmanageable. Paying more on these credit bills now will save money later.

Cut Back on Spending

Cut down the shopping! If you can’t pay cash, you can’t afford it. It really is that simple. You have to break the habit of using credit to make purchases. Nothing will accomplish that better than having to empty your wallet or go to an ATM to see your balance dwindle for a purchase you probably didn’t need.

Diversify Your Income

Extra money coming in means more money to pay on credit bills. Maybe going out and getting a second job is not possible. Try babysitting instead of partying on the weekend. Find a hobby that lets you make something that can be sold. Get an online job part-time and take all the earnings and put them on your credit bills. Don’t make the mistake of rewarding yourself for the extra work. Being out of debt is reward enough.