You are in debt and are getting desperate? There are ways to get out of these toils, and it is a good idea, before you start, to think well about how you got to where you are now. This is very important. Write down the choices you made, keep them handy, and vow never to make those mistakes again. When you have really got it, you have matured and you are ready to get out of debt for good.
Here are some suggestions to help you on your way:
- Insure your debt repayment responsibilities. It is usually minimally expensive and protects your loved ones against your burden if something happens to you.
- Now you need to keep record of everything you spend on a day-to-day basis.
At the end of the month you will know your expenses to the last cent, no guessing.
- When you have done this you need to carefully examine each and every expenditure to see whether it was really necessary. Emergency situations require emergency measures. In reality, we need a warm safe place to sleep, basic nutritious food and transport to and from work/school. If your debt is way over your head, you may need to sell your house, your car, extra clothing, furniture etc. Entertainment that costs money needs to go out the window.
There is an amazing amount of fun to be had by you and your family that is absolutely free. You may even find that these things build a much stronger bond between your family members than expensive entertainment would! Never forget that you are worth much, much more than what you own or do not own!
- The next step is to write down everything you owe and to whom. Write them in order from the smallest debt to the largest.
This method is commonly called snowballing. What you do is set yourself to pay the minimum amounts on every debt. Then any money available after that you pay extra on the smallest debt.
This should free you from that debt very quickly and that money plus the interest you are now saving can go on the next smallest debt and so on. As you proceed, you will see that you have an ever larger amount to free each next debt with, and the whole process will speed up.
If you are one of those unfortunates who are too far in debt to take these steps themselves, you may need to apply to a reliable credit counsellor who will help you to consolidate your debt and give you good advice on how to extricate yourself.
A reliable counsellor should offer initial assessment free and there shouldn’t be any up front costs. Once you are in their hands, you will have a legally binding contract and both parties are protected by law. Bankruptcy will be avoided and your assets cannot be taken from you. If you are in debt over your head and don’t know which way to turn, this seems to me to be a really sensible option.