Get Out of Debt on Your Own: An 8 Step Guide

Get Out of Debt
Image via | Some people spend their entire lives trying to get out of debt. If this sounds like you, then it is time you looked at ways to sort your finances out. Being in debt is enormously stressful, even if you are able to borrow money from to pay off your cards and loans. When you are drowning in debt, it probably feels like an impossible task to get to grips with it all, but there are ways and means to get your life back on track. Here is our seven-step guide to sorting out your debt problems.

1.      Face Up to Your Debt

Burying your head in the sand is not going to help you one bit. It is important to face up to your debt problems. Take control and acknowledge that you have to address your debts. Once you have done this, it is time to move on to the next stage.

2.      Work Out Your Spending Habits

If you are in debt, the chances are good that you have no real idea of where your money goes. The only way to own your debt is to open your eyes and see what you spend (waste) your income on. Write down everything you spend for a week or more. You probably spend small amounts on a million and one unnecessary things, so this is a golden opportunity to bring your spending habits under control.

3.      Increase Your Income

It doesn’t take long to accrue debt when spending exceeds income. Should your problems be caused by a low income, start looking for a better paid job or look at other ways to increase your income. Sell unwanted possessions or take on a second job.

4.      Cut Up Credit Cards

Be ruthless and cut up all your credit cards. It is all too easy to spend money on credit cards, so remove the temptation.

5.      Prepare a Budget

Once you have a handle on your spending habits, draw up a budget outlining your income and essential expenditure. Hopefully you can balance the books, but if the outgoings exceed your income, go back to point three.

6.      Be Organised

Instead of paying bills when you remember, set up direct debits. This will help you avoid any late payment charges, which only make matters worse.

7.      Pay Down Debt

Prepare a debt repayment plan so you have a timetable for paying off your debts. Depending on how much debt you have, this could take a long time. However, do not lose heart. Being debt-free is a goal worth sticking to.

You may have to make sacrifices in your journey to be debt free. Holidays, new cars, and home improvements should all be side-lined until you have resolved your debt problem.

8.      Speak to a Debt Counsellor

If your debt mountain is overwhelming and you can’t see the wood for the trees, talk to a debt counsellor.

No matter how much debt you have, there are always ways to resolve the situation, so never feel as if you are alone. Seek help and face up to your debts.  You can beat it!