There’s no four-letter word quite like debt, huh? Who wants to have a ton of student loans, credit card debt or car payments staring them down? It’s bad for your credit, it stresses you out and generally brings you down.
You’re probably feeling that awful sinking sensation just reading this. Well, no worries. You came to the right place. Today we’ve got some personal finance tips to help you get out of debt. So, chin up and let’s review our advice for getting out of debt.
Step One for Getting out of Debt: Set a Budget
Before you can set goals or make a plan, you have to have a budget. It’s like a blueprint to your financial life. If you don’t have a budget set, it’s time to set one. Seriously, this will change your life.
Setting a budget and sticking to it is an essential first step to becoming debt-free. Nothing’s quite as liberating as taking control of your own finances.
So you’ve got a budget, which is a huge step in the right direction. Now it’s time to start setting some goals for yourself. The most important goals, of course, are going to be getting out of debt. However, you’re going to need to afford food and gas, too. As you know, bills don’t stop just because you’re in debt.
With your budget in hand, make a plan. What things are non-negotiable and have to be paid? Which things can be cut from your spending habits to help you meet your savings and debt-payment goals? Remember, the sooner you pay that debt off, the sooner you’re financially free.
Check Interest Rates
You’ve set your budget and you’re making your goals known for your future. Good! Now, let’s look at those debts you owe. Which ones have the highest interest rates? Alright, those are the ones you want to focus on. They’re doing the most damage, so they gotta go.
You can’t have them sitting there getting bigger and bigger while you’re trying to plan for your future. So, focus your resources on those big mean debts first, then move to the next-highest rate. You get the idea.
Create a Financial Calendar
It’s hard to keep up with all of this stuff, even for pros. You’ll want a calendar, whether that be physical or on your phone, with dates aplenty. Put the due dates of all your bills on it. Keep these visible and fresh on your mind.
Does one of your bills coincide with another large payment? Your calendar can make sure you stay aware of that and save for it. Do you find you often miss due dates and have to pay late fees? The calendar will head that habit off.
The most important tip on the list: stay positive. Take the steps we recommended. Keep your chin up, and don’t sell yourself doomsday prophecies. You’re going to get out of debt, you’re going to be okay. You’ve got this! Now get out there and get out of debt!