If you are overwhelmed by your debt, there are several ways you can get a hold of your finances. Paying off debt can be as easy as getting into it if you know what options are available to you.
Debt can happen to anyone. Maybe you had too many expenses and not enough money to pay them, so you put them on a credit card. Or, you had a big purchase like a home, an education, or a medical emergency and needed to take out a loan that is now too much to pay off. No matter your situation, there are options available to you.
Before paying off your debt, it is a good idea to start financially planning. Financial planning is helpful so you can make sure you do not fall into further debt.
The first step in financial planning is to create a budget by looking at your expenses and income. The golden rule is: not to spend more than you earn.
Are there monthly expenses you can cut, at least temporarily? For instance, you can put monthly subscriptions to streaming services or subscription “boxes”, like for beauty and pet products, on hold. Even if they are not too expensive, cutting these small unnecessary expenses for a short duration can add up quickly. And, you can put these funds towards your debt.
In fact, the best method is to stop using your credit cards altogether. Keeping your cards at home will make them less tempting to use while you are out. Stick to paying with cash or by debit card until you have your finances under control.
Similarly, you can delete your credit card information from your online store accounts. Online shopping is risky if you are in debt, and removing the stored information can make you think twice about the purchase when you reach for your wallet.
By looking at your debt accounts and organizing them by the highest interest rate to lowest, you can also set yourself up for financial responsibility. High-interest debt can cost you more in interest fees than lower-interest-rate accounts. If you can, pay more than the minimum requirement when you pay your monthly bill.
Filing personal Bankruptcy Chapter 7 or 13 is also an option, but it might not be the best for you long-term. Next, learn if personal bankruptcy is a good option for you.