Category: Debt


The Easy way to get out of Debt

When you are in debt it can seem that you will never be able to get out of it. It can feel like it is easy to pile up the debt but very difficult to get rid of it again. However, there are ways that you can get out of debt that may not be so hard as you imagine.

The first step is to stop increasing the debt so that you do not make the problem worse. Cut up any credit cards that you have and start making sure that you only buy things that are necessary. Think about the items that you have to buy such as food, utilities, and rent and separate those form the things that you do not need to buy such as going out, clothing, subscriptions etc. You will find that this can be quite difficult as there are items that are not completely necessary but would make life very difficult if you did not have. However, if you can cut out buying things that you feel are not necessary then this can be a good start in making sure that you do not overspend.

It can be wise to go through everything in fine detail. Look at exactly what you are spending each month, write it all down. Then you will be able to see what money you need to spend and how much is being spent on things that are not necessary. It can be hard to cut down on spending. Buying only the basics can feel like you are punishing yourself. However, if you want to be free of debt it is exactly what you will need to do. You will need to cut back so that you are no longer spending more than you can afford to spend. Therefore you need to look at your income and carefully budget. Make sure that you allocate enough of it to pay for the essentials and then look at what is left to buy other things with. This money is what you can use to start paying off the debt.

You also need to think hard about how you can raise more money. The more of the debt you pay off each month, the more quickly it will disappear. You may be able to get more hours in your job, ask for a pay rise, get a second job, do freelance work, sell things or something else. Think through all of the options available to you in order to raise more money and you will find that there are a lot. You will need time in order to do most of them, but some can be a lot of fun and you could find that you can generate a good chunk of extra income. Also make sure that you are not overspending on things like utility bills, food, rent and finances. Use comparison websites and see whether there are ways that you can cut down the areas where you spend the most money.

Now that you have some extra money and reduced outgoings you need to actually tackle paying off the debts. You need to look at them all and compare them. It is wise to pay off the ones that are more expensive to start with as that makes more financial sense. However, there are some people that prefer to pay off the smaller debts first so they can see them disappearing and that motivates them to keep going. It is up to you which you choose to do.

As you start to reduce your debt, you will pay out less in fees, charges and interest payments and that means that you will have more money left to pay off the debt. You will find that you can pay it off quicker and quicker and it should help to motivate you to continue.

Although the method is easy, the changes that you will need to make could be more of a challenge. Money management can be difficult, particularly if you are not used to it. If you think it will be a challenge then it could be wise to ask someone for help. There might be a close friend or family member that you can open up to who will sit down with you and help you get all of the information together. They could help you with finding extra work or income streams, with deciding what to pay off and when and with finding cheaper items to buy. There are also charities and organisations that can help you with this sort of thing. In the UK the Citizens Advice Bureau would have details of where you could go for help. This could be an option for someone who has no one to help or who does not feel that they can tell friends or family about their situation.