Being in debt can be scary to deal with, especially if you are having problems paying your bills, rent or mortgage. If you have found yourself in a situation where you are in debt or you feel like you might be on the fast track to being without enough money to survive, the items discussed in this guide should be a big assistance to you and your family in making sure that you do not fully go into the red.
It should also be noted here that you are really going to have to put some effort into getting out of debt. If you are not serious and dedicated to getting your financial situation in order, there is a good chance that you will spend years digging yourself further and further into a financial hole to the point where you will feel it is impossible to ever get out. Don’t ever let yourself be in that position!
Pay High Interest Credit First
Making sure to pay off any interest accruing credit debt is always a good idea. And when choosing which of credit debt to start off with, many people shoot for the accounts with the lowest amount actually left. While it might feel good to pay off any account completely, it is costing you money by not paying as much as you can into your high interest lines of credit.
That being said, the way you will want to pay off your credit card or loan that has the highest interest rate first. The way to do this is simple and easy to remember, too. What you want to do is pay the minimum amount payable on all of your lines of credit until you get to the high interest account. Whatever additional funds past the amount of the minimum that you can afford should be put into the payment. This might mean not being able to go out much, but the tradeoff is a good credit rating and freedom from the stress of bill collectors.
Set Reminders for Your Bills
Even if you feel like you are good at keeping track of all of the payments that you have to make in your head, you should still set up reminders for each of them. Studies have shown that people who set up reminders to pay their bills via email or smartphone are much more aware of their overall financial situation, they save money better and over time raise credit scores more quickly than people who do not have bill payment alerts in place.
There are many different ways that you can set up notifications for your bill payments, and there are even numerous smartphone apps that can handle it all for you. However, we recommend that you set up your own calendar with push notifications in either your email software or your phone’s calendar itself. By setting up your own notifications for each individual bill that you have to pay, you will be setting yourself up to break through your debt.
Go Grocery Shopping (And Try New Recipes More Often)
What this is actually in reference to is that you should not be eating out as often as you likely are. Going to restaurants, even fast food, adds up really fast to a ton of cash that you could have used to make payments toward any money that you owed. The problem with doing this, though, is that having a diverse number of meals that you can cook can be tough and things might start to get monotonous.
To get past that, we recommend something like the Better Homes and Gardens New Cook Book. Not only will you save a huge amount of money compared to eating out and be able to put the cash saved toward your lines of credit, but having a good cook book handy will keep you from getting sick of eating the same things over and over again, which means you will be much more likely to stick to eating homemade meals. Lastly, eating at home is often much healthier than restaurant food and there’s even a good chance you will lose weight as well as save money.
Make Micro-Payments When Possible
Whenever you feel like you have the extra cash available to get a nice cup of coffee, buy a bag of chips, eat a candy bar or give yourself any other small treat, you ought to consider putting that $2, $3 or $5 straight into the payment instead. Though things like a candy bar or coffee is stuff that you’d likely forget about right away, putting a few dollars here and there into your high interest credit cards or loan accounts will make paying down your debt much easier. If you make this a habit, you will be surprised at just how quick you’ll see your debt eliminated.