Falling into debt is far too easy but extricating yourself is another story, often leading to infinite stress. However, if you forge a plan and relentlessly stick to it, you can gain the victory in this area, taking back control of your finances and your life itself. Following a few simple principles will help you find your way out.
Calculate the exact amount of your debt. Compare the total to your monthly income and fixed monthly expenses. Allow yourself a budget for other variables such as food and entertainment purchases. This will allow you to figure out exactly how much extra income you may have that you can put directly into paying off your debt.
Plan, plan and plan more. Constructing a strict financial plan may seem frustrating and time-consuming but the benefits are undeniable. The better your plan, the easier it will be to break free from debt. Budget for all your assets and expenses and decide on a set number that you can place directly into your savings account.
Pay cash instead of using a credit or debit card. Withdrawing a set amount of cash from your bank can help you stay true to your budget and not spend more than you have allotted for yourself. Too often, using a card leaves you more unaware of the exact amount you are spending. Having a predetermined amount of cash on hand for each week will make you much more aware of your expenses and how much is left for other uses.
Set aside and forget about your credit cards. Throw them into a cup of water and toss them into the freezer, if necessary. Of course, you must continue paying your monthly bills but do not continue to allow credit cards to be the bane of your existence. The interest that accumulates on these cards is simply not worth the convenience.
Begin paying off debt any way you can. If you have a few loans out at once that are accumulating interest, work on paying off the smallest first. Not only is it easier to retire these smaller debts but it will cost you a lot less in the long run to have a few larger loans as opposed to many small ones. Also, the more debts you have, the harder it is to track them. Also, the satisfaction you get when ridding yourself of these smaller loans will give you an overwhelming sense of accomplishment.
Concentrate on taking small steps at first as you establish your plan and work your way up to bigger payments later. If you instead focus on your full debt load from the start, it may seem overwhelming and impossible to gain control and make you feel your efforts are useless. Just dedicate yourself to making a consistent effort over time and you will soon be on your way to a debt-free life.