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7 ways to escape the jaws of debt


Date Posted: 11/26/2012 5:30:44 AM

Posted By: fly1234  Membership Level: Bronze  Total Points: 15

Have you sunk yourself in debts? Is your second name "Debt"? And are you looking for the cheapest way to pay them off without necessarily taking another loan or do you simply gather them together, pin them up onto a target board and throw darts at them?

It's not going to be easy, but don't murder yourself because i said this. Let's call a spade a spade. I want to show you 7 ways that will get you out of this stinking mess.

Make a budget and stick to it
Don't try to think that you can spend more than what you bring in. Therefore, this calls for a budget. Sit down and write out your budget, listing your biggest needs first, and then how much you can actually spend on these needs. The needs should be pretty well known: rent/mortgage, food, car payment/transportation, insurance, electric/gas/phone bills, etc. Your needs should include all the things you need in day to day life. Drinking or going out to restaurants is not a basic need-unless it is a requirement for your job.

After listing down your needs, create an additional buffer to cater for unforeseen occurrence such as possible spike in the price of fuel or food.

It's time to carry out simple mathematics. Just add everything in the list and ask yourself if you earn that much money, if yes, how much is left? If no, what can you exclude from that list? I know that by this time, you are looking at a figure that is more than your monthly statement. Now, if this is the case, reduce total spending. The decision of how you are going to do it is yours, but it isn't going to be a walk in the park, i promise you! First switch from that posh restaurant you love to

a generic one, relocate to a cheaper apartment, stop driving the car when it's not necessary. Will you keep driving while the creditor is watching? lest he sell off all your car tyres to compensate his money. Whatever decision you choose, only make sure you are comfortable with it. Since you've reduced your spending to manageable levels, resolve to spending only 80% of your total earnings, leave out the other 10% for savings and retirement respectively. But if you are already dead in your debts, use that extra cash(if any) to settle outstanding debts.

Just decide to pay your debts
You need to get out of the jaws of the old debt. The secret is to gather all the credit card on which you owe any amount. Arrange them from greatest to lowest in terms of debts. Right on a piece of paper what you owe. The cards with the greatest debt will be paid first, in that order up to the least.

Get a second part time job
If you are not busy, get something that you can do part time. You can even write for cash if you are good in writing. Use the proceeds in settling your debts.

Trim the fat
Sometimes people find it difficult to save or stay within the budget due to factors such as impulse buying.Even though it's tricky, you can actually be firm in your resolve not to waste money. Discipline yourself so that you don't have to go with friends to avenues that encourage spending, like in parties, drinking dens e.t.c.

Financial counseling
Depending on how you are buried with the debt debris, you may want to see a professional to help you get out of the trouble. Even if you think things are under control(which i don't think may be the case), it doesn't heart seeking a second opinion.

Positive attitude
Keep your head up, motivate yourself until the day you will notice that your earnings have exceeded your spending. Although there are days when no matter how hard you try to minimize spending, somethings just comes along and spoils the plan. This should not discourage you.

Next: Learn how to trick yourself into saving more money without noticing
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