If you’re in debt, chances are it’s not your fault. You are a good person and have the firm intention to repay what you owe. Unfortunately, life continues to put obstacles in your way and you are now in a position where you feel you cannot get out of the hole you are in. With that in mind, here are some personal debt relief tips to help you get back on a solid financial footing.
1.STOP!You won’t get rid of your debt by taking on more debt. Stop using your credit cards now. Anyway, that can wait. No excuses. It’s time to stop creating a bigger financial hole and it’s time to start building a solid foundation.
2.Assess your current situation. It may take some time, but this step is absolutely vital to turning things around. You need to keep track of all your expenses, down to the last penny. Be brutally honest while doing this and remember that no one else should ever see it. Next, list all of your income, regardless of source.Next, write down all your debts, making sure to record the principal, interest rate and minimum payment. You now have an accurate picture of your current situation as a starting point.
- Breathe and prioritize. There can be a lot of stress that comes with personal debt relief, but here’s an easy way to be more relaxed about it. You know how much is coming in and how much is going out, so now is the time to figure out which expenses are the biggest.In general, anything you need to stay alive or maintain your income should be your top priority. Good examples are food, housing, utilities, medicine, and maybe a car. Low priority items might include cable TV, an extra cell phone, cigarettes, and junk food.
- Keep your expenses under control. It’s a natural extension of setting your priorities.In fact, if you have prioritized correctly, this step will be relatively simple. Now it will just be a matter of removing or reducing the lower priority items. Keep working your way up the list, reducing each expense as much as possible. If your income is extremely limited, make sure the highest priority items are taken care of first.
- Attack!For now, you should now free you much more money by reducing expenses on low priority.