Having debt, being unable to meet your monthly budget, having maxed out credit cards, is something many people struggle with around the world. It’s a common problem, and it shouldn’t make you feel depressed, because there are things you can do to get yourself back on the right financial track, and where you want to be. Here’s what you need to do to get out of debt.
First, the most important part is to write down both your monthly income and your spending. This has to be done in an extensive, complete way, so that you know exactly how much money you make, and where it’s all going. If you have a job, or two jobs, and maybe make some money on the side, write that all down on a sheet of paper or a spreadsheet, and count that all up. Then, on another sheet, write down all your monthly spending, including both the usual stuff like mortgage, power, insurance, cable bill, everything that you spend every month. Also add all the entertainment spending, going out to bars, restaurants, buying a new stereo, etc. Once that’s done, compare the two amounts. If the spending is higher than the income, which is likely the case, then you need to start cutting down on spending, or raising your income by getting another job, until both amounts are equal.
There’s many ways to cut spending. If you have cable TV, maybe you don’t need all those channels, and you can get a less expensive package. For your Internet connection, you may not need the highest broadband speed. Your cell phone may not require unlimited calling plans. The point here is to live within your means, which is the number one key way to get out of debt. Once that’s done, at least now you know you won’t incur new debt, and you can start taking care of the previous ones. There are many options to deal with credit card debt, like getting a second mortgage, debt consolidation companies, and so on. If you managed to make a balance budget, including extra money to slowly pay down those debt over the next couple of years, you may not need such a solution. However, if the task seems insurmountable, then getting the advices of one of these companies may be warranted. There’s ways they can reduce your monthly payments by offering a single interest rate which may be advantageous if you’re paying high rates on your credit cards.
Overall, getting out of debt is a slow process, and not something that will happen overnight. But it’s something anyone can do with a bit of discipline. It only requires a good budget, and the willingness to adhere to it. Once you can do that, then you’re on your way to being debt-free, and on the road to financial freedom.