Having debt is quite normal these days. Because of sky-rocketing prices, it is almost impossible to be debt free. And the ironic part is that even if you want to apply for so-called ‘good debt’ like a home loan, you need to have debt in the first place. So how do you cope? How do you manage your debt in a responsible, pain-free way? Here we offer some debt advice on how to remain debt free:
1. Jot down all those creditors you owe money to and how much you owe
Most debtors are in the dark about how much they owe and simply pay their debt every month out of habit. You get your statement and pay your creditor without even knowing where your money is going and how much you still need to pay. You need to sort out your finances in order to become debt free. Get on top of your bills and statements and try to organise your finances. This debt advice will help you know how much you will be paying and for how long.
2. Work out your incomings and outgoings
Write down what you have coming in on a weekly/monthly basis and what your expenses are. Determine how much money you have left over. This money could be used to pay off debt quicker, eliminating unnecessary interest rate fees.
3. Contact your creditors
In this way you can work out any reductions or extended payment dates if you are struggling with repayments. Most creditors are fairly understanding and will most likely accept a smaller amount or give you an extension. Explain your situation and circumstances and they will surely help you in any way they can.
4. Cut back
This is something that most people struggle with. Cutting back on spending obviously means more money to pay off your debt quicker. Try to save every cent you have and you will see how quickly this can add up to a substantial amount.
5. Take advantage of free source and online debt advice
You can get free, impartial debt advice online and offline if you know who to speak to. Your bank will be able to put you in contact with a financial expert giving you generalised debt advice. Also, speak to others – family and friends – about how they remain debt free or how they manage their money.
6. Work out a budget, and stick to it
Plan what you are going to pay off one at a time. Set financial goals and targets and stick to them. Living on a budget may seem dull, but it is the best way to pay off your debt and enjoy financial freedom in the future. Remember to set yourself realistic and manageable goals.
Author bio
This article was written for Harrington Brooks and offers debt advice on how to get rid of debt.