Debt is a word that makes most people cringe. This is especially true for those individuals who have found themselves in a situation where their debt seems totally insurmountable. If this sounds like you, take a deep breath. There are still some things you can do to reduce, and ultimately pay off, your outstanding debt without having to file for bankruptcy.
Create a Frugal Monthly Budget
You know how easy it is to let your debt get out of control. Part of the issue is that it’s hard to keep track of your expenses. All people can benefit from keeping track of their spending with a monthly budget. If you’re deep in debt, however, this become essential.
People who are really tight on money should try to include as many things as possible in their budgeting process. This can be tricky though, because there are so many things that we spend money on throughout the month. Here are some of the most things to monitor:
- Dining Out and Going Out for Drinks: You want to have some instant gratification after a long work week. There’s nothing wrong with having that feeling. Just make sure you keep an eye on your expenses, especially when alcohol is involved. It’s much less expensive to do these things at home.
- Memberships and Subscriptions: You probably spend more on subscriptions to services like Netflix, Amazon Prime, your gym, or delivery subscriptions like Birchbox, than you even realize. Add up all your subscription costs for the month. Maybe cancel any that you aren’t utilizing for their full value.
Don’t Take on More Debt
This might sound like an obvious solution. But avoiding debt can actually be extremely difficult. You need things in order to survive in the world. And things cost money. Do your best not to build up your debt. If you need to get a new vehicle, choose one that’s not your first choice, but fits within your budget. When you’re really deep in debt, you need to think about what the right decision financially over what you want the most.
Find Services That Can Help
Fortunately, there are places you can go to get help with reducing your debt payments. This might sound too good to be true; but it’s not. Freedom Debt Relief is one of the top providers of debt relief services. They’re a trusted company that has helped real people greatly reduce the amount they owe to lenders. You can look at Freedom Debt Relief reviews online to see how other people have benefited from their services. Organizations like these work with creditors to negotiate your debt down to a more manageable level, which some people can then pay off in as little as 24-48 months. You might even qualify for their Consolidation Plus service, which is designed specifically for Freedom Debt Relief clients who want to consolidate their enrolled debt.
Pay Your Highest Interest Debt First
Not all your debt is the same. If you want to get out of the hole, you need to be smart about what you’re paying and when. You need to address your highest interest rate debt first and foremost. This is the money that’s accruing the most interest. You can save yourself a ton of money by tackling your highest interest debt first.
Don’t Just Pay the Minimum
Does it seem like your debt just keeps growing even though you’re paying money to reduce it every month? This might very well be the case, even if you’re not adding lots of new debt. Paying the minimum does little to reduce your overall debt load. And if you have a lot of debt with a high interest rate, that money might just be disappearing into interest. Try to pay as much of your debt as possible each month. This will start to take real chunks out of what you owe to lenders.
Paying off your debt can often feel like an impossible task. When you find yourself in this situation, try not to panic. There are still things you can do to pay off your bills without resorting to bankruptcy.