Clever ways to reduce or eliminate your debts

If you have debts then you definitely know how stressful it is. Getting in debt is easy, getting out of debt is quite complicated, no matter if you are dealing with student loans, credit cards or family loans.

The task is possible, even if you are short on money. It is understandable that you do not know where to start; this is why we have decided to write this article, to share with the persons, who have financial struggles some clever ways to get rid of debts.

Sometimes the debt is the consequence of having an unexpected child, other times it is the consequence of too much vacation spending, and there are times when the debt is the result of overspending on a regular basis. Many people do their best to get out of debt, but there are times when they face difficulties and they give up.

This does not have to be your case; you have to be determined to eliminate your debts, or at least to reduce them enough to get rid of the stress they cause you. If you are ready to start your research, here are the steps you have to follow you get rid of your debts.

Stop borrowing money

It is no use in trying to cover your present debts if you continue to make other ones. If you want to get rid of debt fast, you should make a conscious decision to stop your current lifestyle and to stop borrowing money.

Stop using your credit cards, no more decorations for your living room, no more vacations you do not afford and no more tickets to concerts. Focus on paying your debts and when you will accomplish your goal you will have the opportunity to save money and do all these things you put on stop for a period of time.

Find out how extensive your debts really are

The greatest issue people face when they want to pay their debts is that they have no idea what the extent of their debt is. If you will skip this step, there are great chances you to waste money and blindly pay bills. You need a plan, and this plan relies on the real sum of money you have to repay.

Stop feeling guilty about your debt, you should not bury your head in the sand hoping that the situation will improve. This is exactly what credit card companies want, you to pay the minimum amount and hope that you will get out of debt. However, if you know the truth and you know the sum you have to repay you will be able to make an effective plan.

Create a plan of attack

Now that you know exactly the sum you have to pay, you do not have to worry, it may sound like a big number but if you create a plan, you will be able to pay it. When making a plan you have to prioritize your debts, and you can easily do it according to their interest rate.

Focus on paying the loan with the highest interest rate first and then you will find easier to pay the others. Another strategy is to pay more than you owe every month, in this way, you will be able to cover the debt faster and you will save money because you will cut down from the interest rate.

If you consider an impossible task to pay all your debts, then you should check for some alternative solutions. You can ask the help of an organisation that establishes individual voluntary agreements, a debt solution that can help you consolidate all your debts and pay a single monthly sum.

You will no longer have to face your creditors, and your debt will be reduced to the sum you can afford to pay. In no more than 5 years, you will have your debt written off. Check this source if you want to find more about this solution.

Create a realistic budget

When you create your budget, you have to consider your income and expenses. This is the only way to get out of debt fast. If you create a budget, you will understand if you can save money, if you have a monthly surplus you can work with to pay your debts, or if you are experiencing a deficit. Your goal should be to increase your surplus and to use the money you save to pay your debts.

If you have difficulties in saving money from your present income then you should consider the option of earning some extra cash. How can you do it? One option is to work extra, for example if you are in a commission-based job then you will have to make more sales to increase your monthly income. If you have a salary job and you are working limited hours then you can have a second part-time job. A great idea is to deliver pizza during your free time; it will help you cover your debts fast.

The second option is to cut down your expenses. You may think that you are spending the minimum amount you can, but if you will make a list with the things, you pay for you will notice that some aspects can be cut off the list. You will have to cut down the times when you eat at a restaurant; you should start cooking your meals home.

If you use to buy food when on your lunch break you can save the money you spend on this habit if you start preparing your meals and eat homemade food at work. Find the unnecessary amenities you have in your life and stop them for the period of time needed to pay your debts.

Every time you have some extra cash, you should throw the sum at one of your debts. Do not use the money to spoil you thinking that you have paid your installment this month; you should pay part of the next installment. The more cash you put towards your debts, the faster you will eliminate it.