Pulling yourself out of debt isn’t as easy as getting a few credit card bills taken care of. It’s about learning how to budget, breaking your habits, and implementing strategies that don’t just get you out of your current fix, but set you up for long-term financial stability, whatever future financial emergencies may occur. We’ve put together a list of essential steps to get out of debt, and stay out for good.
A Fast Fix
If you’re struggling to cover the high-interest fees charged by the credit card giants, transferring debt from one card to another is a recipe for disaster. A much better option is to research fast small loans with lower charges to take care of the immediate crisis, and stop the interest in its tracks. Safer credit options such as these effectively convert your debt to lower interest rates, and frequently have significantly more generous repayment terms compared with plastic.
Are you wondering where the money to pay next month’s rent is coming from, but still binging Netflix and ordering the fast food delivery you’ve become accustomed to in better times? This is a problem. When we become accustomed to a certain lifestyle, it can be hard to break the habit and swap the expensive lunches and cafe coffees for homemade sandwiches and brewing your own latte. Analyse your spending patterns and start with the small things. Pretty soon you’ll realize how easy and economically liberating it can be to eliminate wasteful spending from your life.
Establish a Realistic Budget
Your best friend during debt is naturally a budget; a game plan outlining what you currently spend and charts a pathway to where you need to be. However, it’s all too easy to make a fantasy, aspirational budget that you can’t possibly stick to.
This can be more harmful than you think, as when you’re not following the budget you allow the floodgates to open and the bad habit spending to slip by without moderation. Ensuring your budget is both practical and attainable, with wiggle room for unanticipated expenses and the occasional luxury, results in a budget that you are for more likely to stick to for the long-term.
Work on the Side
If you’re struggling to make ends meet with your standard wage, it may be time to take on a side hustle. Many professionals supplement their income with freelance work on the side. It’s an excellent way to boost your savings account or cover the day-to-day expenses that come between the big-ticket items. If you have the time, then finding extra work is nothing to turn your nose up at it.
Prioritize the Debt
The single most important item on this list is this: If you’re not prioritizing your debt, then you’re asking for it to come back in a big bad way. When you’re starting to get your head above water and accumulate some savings, that’s when the temptations begin.
Lapsing into negative patterns of over-indulging in expensive brunches or nights out on the town at this point will undo your hard work. Don’t stop grinding until both you and the debt are in the clear.
Remember, these steps are not only to get you out of debt, but to keep you there for good. If at the first sign of positive balance you jump back into the old habits, you won’t stay on the up for long. Stick to the budget, maintain disciplined spending patterns, and you’ll reap the benefits.