How to take charge of your debt
Take charge of debt.
Are you struggling to pay off a mountain of debt and completely overwhelmed? Do you frequently pay bills after the due date? Are you regularly asking friends and family members for loans?
Eliminating debt is hard, I know. It takes time, persistence, and in all honesty – a lot of work.
When I maxed out my credit card a few years ago and found out that in addition to that, I also owed the government over $10,000 in taxes, I panicked. I had just gone out and purchased a new vehicle (not one of my smartest ideas!) and now I had two more debts to manage.
It was scary, but I allowed myself to feel scared. I also forced myself to do something about the situation I had put myself in. I needed to find a way to dig myself out of debt before my debt pile grew any bigger. That was the beginning of my journey to a debt-free, frugal life.
If you’re someone that is struggling to pay off debt, let me assure you that no matter how much debt you have, it is possible to get rid of it. It seems as though many people think that debt is just a way of life and I’m here to tell you that it doesn’t have to be that way.
Take charge of your debt and start living a happier, debt-free life.
1. Embrace frugal living.
One of the quickest ways to start saving more money and paying off your debt is to simply embrace the beauty that is frugal living.
Useless, cook at home, buy used – by adapting to a frugal lifestyle, you will cut out the excess and be able to focus on what really matters.
2. Contact creditors.
Take responsibility for your debt and contact those creditors that have been hounding you to try and strike some kind of deal with them.
If they know that you are struggling to pay your bills, many creditors will be happy to offer you some type of discount in order to pay off the money that you owe them.
Just by asking, you may be able to get a lower interest rate, or they may even lower the amount that you owe.
3. Cut back on expenses.
When you’re trying to pay off debt, you should not be spending money in areas that it doesn’t need to be spent.
Eliminate all of the luxuries and cut back as much as possible on things like groceries, hydro, water, and gasoline for your car.
4. Create a budget.
The key to financial success is the budget. Without one, you are spending your money aimlessly and this often leads to financial ruin – which is why I always recommend that everyone create a budget.
It’s not hard to do and is a great way to track your money so that you always know how much you have.
5. Make more money.
Easier said than done, I know – but earning more money will always help to pay off debts.
6. Create an emergency fund.
An emergency fund is an important part of any financial plan. Even if you have a pile of debt to pay off, make it a priority to set up an emergency fund – because an emergency will happen, and you don’t want to end up having to pay for it with a credit card.
Start out with an emergency fund of $1,000 until your debt is paid off, and then you can increase it if you feel the need.
7. Take extreme measures.
Sometimes you have to do extreme things to pay off your debt. Consider becoming a one-car household, a second or third job and for some, it may actually be necessary to cut your losses and file for bankruptcy (hopefully it doesn’t have to come to this, though).
By deciding to take charge of your debt, you are taking the first step in becoming financially successful. Debt is one of the worst things you can do to your finances and so I encourage you to pay it off completely as soon as you possibly can.
When things seem dire and you feel like you can’t ever get ahead, remember that there are thousands of others going through the same thing. Thousands of others that will likely dig themselves out – you can dig yourself out, too.
Being debt-free is an amazing feeling – don’t give up. You can do it!