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Are you in a lot of debt? Not sure what you can do about it? If you are struggling with debt, you’re not alone. Debt affects up to eighty percent of us. Stop and think about that for a second, as many as eight people in every ten will have debt problems of some description at some point.
Debt can cause major issues in your life. It can leave you feeling stressed and depressed and the financial worries can really keep you up at night.
Although debt may feel bleak at the time, it is possible to get out of it. But how do you do this?
In this article, we’ll look at a selection of tips aimed at getting you out of debt. Some will be practical tips designed to change the way that you handle your specific debts, while others will change your lifestyle and the way that you deal with spending.
Admit That Your Debt Is Out Of Control
The first thing that you need to do when you are in debt is to admit that your finances are out of control and that you are unable to manage them anymore.
If you hold onto the view that you don’t have a problem, you’ll never solve your debt worries. But if you can let go and admit that you need help, then you will be more likely to resolve your issues.
Stop Ignoring Bills And Bank Statements
When you get bills and bank statements, do you put them in a pile without opening them or reading them? You may even be someone that throws them away. ‘Out of sight- out of mind’ is not a logic that you should apply to your finances.
When you get a bill or a bank statement- open it. Make sure that you read it and that you fully understand your current financial situation. If you need to take action based on the information in the bill or statement, then you should do this immediately.
Use online banking so that you can keep up to date with exactly how much money you have in your account at any time.
Get Help From A Debt Charity
Speak to a debt charity and get help with your finances. By getting an impartial review of your finances from an organization that was set up to help people who, like you, are struggling with debt, then you may find solutions to your problems.
A debt charity may help you to restructure your debt in a way that will make paying it off more manageable.
Prioritize Your Debts
If you have several different debts with a number of different organizations, you’ll have different interest rates to think about. You’ll also owe different amounts and have different installments to make on your loans. It is essential that you make the minimum payment to each of your debts each month. Where possible, you should repay more than the minimum amounts required.
Often, the minimum required payment will only cover the interest. This is certainly true of credit card debt.
Pick the highest interest debts to repay more than the minimum payments on as these will cost you the most in the longrun.
Use 0% Balance Transfer Offers To Clear Your Credit Card Debt
If you owe money on a credit card then you will know that the interest rates can be quite high. It is easy to get stuck with a lot of credit card debt and be unable to clear it easily, especially if you are not able to make big payments.
One of the best ways of reducing credit card debt is to get a 0% interest balance transfer. By taking out a new credit card which has a 0% balance transfer feature and shifting the debt to it, you could save yourself a considerable amount of money and make it easier to repay the debt.
Find out how long the balance transfer offer is applicable for. Often, interest will kick in after a year or 18 months after which time, if you still have debt on the card, you will need to move it again to another card with a similar balance transfer offer.
If you have several debts with a number of different lenders, then you should consider consolidation.
When you have different debts you’ll have different end dates on loans. You’ll have to worry about multiple payments and juggling interest rates. Often, when you have multiple debts there is no end date by which you’ll be free from your debts.
By looking to find installment loans with Wise Loan, you can pay off all of your existing debt using your new loan. Then, you’ll just have one single loan to repay. This will mean one outgoing payment, one interest rate, plus you’ll have an end date by which time you will be completely debt-free.
Learn To Use Your Credit Card In The Correct Way
Credit cards may be the source of a lot of your debts, however, they can be very useful when they are being used in the correct way.
Credit cards are useful for making major purchases with, however, you must repay the debt immediately, or you will end up deeper in debt.
They are useful because of the protection they offer. If anything goes wrong with the transaction or the item you are purchasing, you will be able to get support from your credit card company.
Close Any Unused Cards And Accounts
If you have any unused credit cards or bank accounts with overdraft facilities, then you should close these. Not only will closing unnecessary lines of credit improve your credit score, but it will also ensure you are not tempted to use them anymore. Therefore you won’t get sucked in further debt.
Review Your Outgoings
Go through all of your outgoings and list them in a spreadsheet. Try and look at where your money is going to each month. List all of your outgoings from the last few months and put them into columns based on what type of outgoing they are. For example, have a column for household bills, food and drink, miscellaneous spending, and for debts.
Look for patterns in your outgoings. This may be a useful exercise for spotting spending trends.
Cancel Any Subscriptions That You Don’t Need
While you are going through your expenses, identify any services products that you are currently paying for that you’re not getting the full benefit of. You may have subscriptions to TV steaming services that you’re not watching often enough to warrant paying for. You may be paying for gym membership but are not attending the gym.
Anything that you’re not using should be cancelled. Although it may only seem like a small saving, this will soon mount up to something bigger.
Switch Utility Companies
There is a chance that you may be paying too much for your utilities. When signing up for services such as these, you may get some enticing introductory offers. But eventually, these offers will expire and you’ll be left paying much more.
Shop around and see if you can switch to a new provider. Remember, that the great offers that they will entice you in with will only last for a certain amount of time, so you’ll need to look again at switching if the price becomes too high.
Create A Budget
If you have a budget in place that that will cover all of the different aspects of your life, then you will be able to better control your finances.
You will need to work out exactly how much your regular outgoings will be. Ensure that this includes all of your loan and credit card repayments as well as all of your bills.
Compare this with your total income and whatever you have leftover should be used to cover everything else such as food shopping, spending money, and travel costs.
Split up any remaining money realistically and make sure that you have enough money in your budget to buy food.
Change Your Eating Habits
Often eating and shopping habits contribute to the debt that you find yourself in. If you’re someone that eats fast food and takeouts instead of cooking homemade meals, then it is likely that you will struggle with money worries surrounding your food budget.
This is a habit that you will need to break. You should start seeing takeout as a treat rather than having regularly.
Create meal plans. This will mean planning out what you will eat in advance. It will also make shopping at the supermarket easier as you’ll have a very specific shopping list.
Using batch cooking is a great way of ensuring you have low-cost meals that are already prepared for you. You can batch cook meals by cooking up a large quantity of a meal and portioning it up before freezing it. You can cook several meals at once in this manner to eat at a later date. This is a very cost effective way of saving time and ensuring you get to eat a good meal.