Financial debt can lead to financial ruin quickly, especially now in a down economy. Over half the US population is plagued by debt. Statistics have shown that most American households are $8,000-$9,000 dollars in just credit card debt alone. This does not include their house, cars, and student loan debt. However you can take steps in crawling out from under all this debt if you follow the tips in this post.
1. Keep Track Of Your Debt
Sit down grab all your bills and jot down everything you owe. It’s important to see the reality of your situation rather than just avoiding the truth. You can either keep a journal on paper or a spreadsheet on your computer. You should be keeping track of all your regular monthly bills as well as other debts you owe. Write down what you can afford to put towards those debts each month.
2. Credit Score
You also want to keep tabs on your credit score. There are a number of websites that can give you access to this for a small fee. If you don’t want to pay you can get your credit report (not your score though) at annualcreditreport.com. Your credit score will also tell you about bills you may have possibly forgotten about or about errors that are negatively affecting your credit. The reason your score is important is because the interest rate you are being charged on your debt is directly related to this score.
3. Spending Habits
It’s common sense, you should not spend more than what you earn. People have a habit of living above their means, trying to keep up with the Jones’ and whatnot. This is precisely what can lead to debt. It’s like George Carlin once said: People are spending money they don’t have to impress people they don’t like. Therefore, control your spending habits because if you don’t you won’t ever get out of debt.
4. Extra Income
If you can’t cut back any more, it’s time to generate some revenue. Try finding a part time job, or create your own job. Are you good at writing or blogging? There are places online that will pay you for that. Are you good with handyman work? Place ads online for people looking for a handyman. There are lots of ways to earn a little extra cash. It may not be a lot, but something is better than nothing.
5. Control Your Credit Cards
Only use credit cards for emergencies. Try to pay them off monthly if possible. If you can’t pay it off monthly, pay the minimum plus a little extra. Ask your credit card company for a lower interest rate on your card. It doesn’t hurt to try. If you qualify, there are also zero percent interest cards out there that you can switch to. The way it works is simple. You transfer the balance and you don’t pay any interest for an introductory period, typically twelve months. But if you do this, do everything in your power to pay off all of the debt within this promotional period.