The average American is in debt. More than half of all US residents are spending a lot more every month that they earn, and credit is being used to make more significant purchases or to see people through to the end of the month. It’s easy to get into debt, but it can be very challenging to break free of it. Sticking your head in the sand and hoping that your debts are forgotten is a mistake.
By confronting your debts, you make it much easier to take the necessary steps that will see you living the debt-free life a lot sooner. If you want to have control over your future, then here are some of the vital steps that you can take that will see you better positioned to leave your debts behind.
Pay Back More
All of your debts will have a minimum payment option, and that’s what most people will pay every month. If you want to save money on the interest rates, then being able to pay back what you owe faster and upping your minimum payments is the key. So not only do you speed up the time it takes to pay back what you owe, but it also means that the total amount that you pay back will be less.
Keep on top of how much you spend and how much you can afford to pay back every month and always pay the maximum amount that you can afford. Don’t be content with making minimum payments that will always end up costing you more in the long run.
Get Professional Help
There are more resources available for debt management than ever before, simply because more people are living in debt than ever before. If you find that you owe more than you can ever afford to pay back, then you may even have to pay extra fees if someone brings a lawsuit against you. Make sure that you know when and how to get assistance with a debt lawsuit, or that you talk to professionals about your existing debt issues.
“It takes as much imagination to create debt as to create income.” – Leonard Orr
With help available, no matter what the existing debt levels or your monthly income, don’t assume that you have to face your financial future alone. Get professional help when and where you can, and you’ll have access to a broader range of options than you might think.
This is a method for getting all of your debts addressed and paid off in the quickest way possible. Intended for those who owe money to multiple lenders, snowballing means tackling the lowest valued debt first. List all of your current debts and organize them with the lowest total at the top. Then, make the minimum payments possible on all but the lowest debt, and pay off as much of that small debt as possible. You will then be able to pay off that smaller debt faster and can then move onto the next one while using the money that you’ve saved by eradicating the lowest.
“Every time you borrow money, you’re robbing your future self.” – Nathan W. Morris
By tackling each debt in this targeted way, you can watch as your debts get resolved one by one. Done right, the snowball method is one of the most practical ways to change your debt payments and see real and positive change on a month by month basis.
Create a Bare-Bones Budget
The less money that you spend every month, the more money you can throw at your debts. The greatest way to tackle debts is to make larger repayments, and that means creating a budget that means you spend less and less on daily living every month. Living frugally is always a good idea, especially if money is tight. For those in debt, more frugal living should be a priority.
Look at all of the ways that you can cut your monthly expenses. There are different ways that you can drastically reduce how much money you spend every week, but you don’t have to go wild and do everything possible. Even simple changes that result in you having an extra $20 a month to put into your repayments is better than wasting cash that you don’t have.
Tackle your Habits
This can be a bit of a significant change, and not everyone will want to even consider it, but those bad habits that you have are probably costing you a lot of money. From smoking 20 a day to that ever-growing shoe collection, our habits are one of the main reasons for getting into debt in the first palace.
“Today, there are three kinds of people: the have’s, the have-nots, and the have-not-paid-for-what-they-haves.” -Earl Wilson
Some habits are harder to stop than others, but even just cutting down on how much you smoke, drink, or buy expensive coffees on your lunch break, can have a very positive effect on your bank balance. Look at replacements that don’t cost as much, or even consider getting rid of those habits entirely. Remember, the less money that you waste every month, the more that you can put towards your debts, meaning that they will cost you less on interest rates while speeding up the time spent living with those debts.
Living with debt hanging over you is stressful, but there are answers. Don’t just stick your head in the sand and hope for the best. By facing your debts, making a plan, and following through, you’ll find that living the debt-free life is more than achievable no matter how daunting your total debt might be.
“Debt is like any other trap, easy enough to get into, but hard enough to get out of.” – Henry Wheeler Shaw
Don’t make the mistake of thinking that debt is just a necessary part of life. Be proactive, and your future will be much more financially secure.