With the cost of living rising and income remaining stagnant, it is very easy for most people to get and stay in debt. Income growth has not matched the rising cost of living for about 10 years now. Food, housing, fuel and other important commodities are continuously rising in prices. This scenario is pushing most people into using credit cards in addition to other loans hence getting into more debt. If in case you have children, the situation becomes worse as childcare has of late become very expensive. But you shouldn’t lose hope just yet, there are various ways you and your family can relief yourself from the rising debt levels. Let’s look at some of these strategies.
- Get to Know Your Debts
The first and most important step is to know your debt. Get to know your overdrafts and other loans and the interest you are paying. With this knowledge, you will know which debts to prioritize and which to pay at a later date. Focus first on clearing debts accruing a lot of interests to prevent yourself from getting into a financial crisis, then move on to those without interest. It would be wise to call your creditors and inform them on your plan to avoid them piling too much pressure on you. Creditors like Lendgreen online loans are usually flexible to help you plan on how to repay your loan.
- Change Your Spending Behavior
Check your current income against your current expenditure. There are probably things you are buying now that you should not be buying. There are things you spend a lot of money that you can do without. Identify those things and just stop buying them. At this point in time, you should be zeroing on the main problem which is to clear your debt, so any extra buck you can save will go a long way into helping you realize this goal.
- Have a Realistic Budget
Many people never bother to have a budget to track their spending, hence spending carelessly. Apart from tracking mortgage and rent, most people are never aware of where their money ends up. This kind of living is dangerous as it is one of the main reasons you find yourself in debt. Having a simple budget is very easy. There are so many resources online that can guide you on how to draw up a simple budget. A budget will go a long way in ensuring that you track your expenses and prevent you from spending your money on unnecessary stuff.
- Find Other Avenues of Making Money
Look for other ways to earn an extra income other than your day job. You can identify online ventures that you can do at home after work like freelance writing or online tutoring. We all have that one thing that we can do that we can also teach others to do. Make sure you start that cooking or gym class and get some more cash. With an extra source of income, you will not only avoid spending during your leisure time, but will actually earn to clear off your debts.
- Close Your Credit Cards
Getting rid of your credit cards should be your ultimate goal of living a debt free life. But first you have to lay down drastic measures like having an emergency fund. You can try and save up some money that you can fall back to incase of an emergency to avoid going back to your cards. You can do this after you have cleared all your debts. Just ensure that you get rid of as many credit cards as you can as they tempt you most of the time to spend on items you don’t need.
- Stay positive
Getting out of debt is not an easy journey. That’s why you need to stay positive. Do not let any negative thoughts bring you down. By having a positive attitude about your journey to a debt free life, you will also discover new and innovative ways of doing it. Like everything else in life, your attitude matters more than anything else.
