Financial Strategies to End that Debt Cycle
You hate to even look at your credit card statement, let along your bank account. You know that the last year or two of spending has left you in debt up to your proverbial eyeballs and now you have to pay the piper. But what if I told you there are ways to get out of debt without having to be the kind of genius who could invent amazing software like the Microsoft Dynamics Ax?
While it may not feel like it now, you can get yourself back into the land of the green, but it will take some commitment on your part. If your debt is all in your credit cards, here are some proven strategies to help you dig yourself out without having to go through bankruptcy court.
Snowball Your Payment Strategy
This works best if you have quite a few credit cards with varying amounts owed on each of them. Take a look and list the amounts due on each card. Then take the smallest one and really work hard to put everything you can towards paying that balance off as quickly as possible. Every other card you simply pay the minimum due.
Once you have taken care of that one credit card, move on to the next smallest one. The money you have saved by not having to pay off that first card can now be put on the next one. It may take you a few years this way, but you will get out from under.
Add a Side Job
I have known people who take on a part time job that is simply to pay off the credit card debt they have accumulated. While it can be tough, especially if you have kids, it will pay off big time in the long run. You can even sit down with a bank manager and your new payment stub in hand.
Together you can see if you can’t negotiate a better interest rate that will help you pay if off faster. Just remember that there is light at the end of this tunnel and once the card is paid off you can return to just one job, which will feel almost like a vacation by that time.
Cut Your Life to the Minimum
Some of us don’t even realize how much we spend on things we don’t need until we hit the wall on our credit card statements. So, it might not be a bad idea to take a look at what you spend each month and see if you can’t cut that right down to the bare minimum. Just eliminating cable television and eating out might give you a few hundreds bucks a month to use to pay off that debt. Pack a lunch instead of eating out at work.
Take the bus to get around and tell your insurance company you are storing the car for the next year and need to cancel your insurance. Read books from the library instead of watching TV or spending all that time on the net. Cancel the internet service and switch to a pay as you go phone without a data plan. You would be surprised how much you can save by chopping out these expensive toys in our lives.