It's not easy to see your way out from under a mountain of debt. It's discouraging, frightening and depressing. You might think there is no way you will ever find your way out of this mess, and it's self-defeating to even try. Don't lose hope! Even small steps can make a big difference, and if you stick with a plan, it can be a lot simpler than you think. Easy? No. But the end result is a debt-free life and is well worth the effort.
Here are six ways to relieve yourself from debt.
- Perform an honest evaluation. This is the first step toward debt relief. If you don't know where your money is going, you can't formulate a plan to get it under control. Track all your expenses for a week to a month. List every single penny and where it goes. Chances are you will see a definite spending pattern which will lead you to the next step.
- Cut unnecessary expenses. This isn't a lifelong choice or a punishment, although the choices you make now might be easier to live with than you think. Cut the cable, stop eating out so often, utilize the library – there are thousands of different ways you can downsize to help you save money to put toward becoming debt-free.
- Evaluate your credit cards. One way to get yourself on the right track is to study your credit card picture and consider balance transfer credit cards to get you on the right track. Determine the best credit card offers for your situation, and make sure to check the fine print in the agreement. It's easier, and less expensive, to consolidate your loans in one payment.
- While you're at it… If credit card companies are calling you and harassing you constantly, take one of their calls and see if you can negotiate a lower interest rate, a freeze on late payment fees or any kind of financial break so you can get on your feet. Most companies would rather work with you than take a total loss, but you do have to talk to them about it.
- Speaking of credit cards… Avoid making late payments at all costs. This will really bury you. The late payment charges on top of the high interest rates are crushing. Make more than the minimum payments or you will never clear the principal. This should be your priority if you have a lot of credit card debt.
- Formulate a budget. Now that you know where your money is going, what the necessary expenses are and negotiated lower rates with your credit card company, it's time to sit down and come up with a livable budget. Remember to leave yourself some wriggle room in case something comes up.
Step by step, and you can see your way to financial freedom and relieve the stress from being in debt. Once you make the first move, the rest becomes easier as you go. You can do it!