Getting in debt is easy, but getting out of debt is a different story. When you are already in a deep hole of debt, you just want to know how to get out of it as fast as possible. 360 Credit Consulting knows just how important it is for your credit score to have a zero debt balance. Today, we will discuss some ways that you can start working your way out of debt when your finances are still tight. Be sure to call us in Austin for your free consultation and let us help you repair your credit score today.
Create a Budget
If you haven’t already done this, then you need to sit down and work on a budget right away. A budget allows you to clearly see how much income you have, what bills you have to pay, and how much money you will have left over after your bills have been paid. Once you have your budget on paper, you will be able to make better decisions about where you are spending your money. It will also allow you to see what extra money you might be able to use to pay off some of your outstanding credit. Paying your debt is an important step in achieving the credit score that you want.
Stop Digging Further
Once you know that you are in debt, you need to decide to put a spending freeze on all non-essential items. If you struggle with self-control, then maybe you need to take some more drastic steps, such as cutting up your credit cards so that you don’t continue to spend money that you don’t have. Another option is to take the one credit card that you need and freeze it in a block of ice. The idea is that by the time it has been thawed from the ice, you will have had enough time to think about how you were planning to use it and potentially avoid making a spur-of-the-moment purchase.
Make a Plan
When you are serious about paying off your debt, it is important that you make a plan of attack. If you don’t have a clearly laid-out plan, then you will not be as effective in getting rid of your debt. You need to make a list of all of your debts along with the accompanying balance and interest rate. Once you’ve made this list, you need to prioritize the bills in terms of which should be paid off first. Depending on how you like to organize things, you might choose to start with the debt that has the highest interest rate, or the one that has the lowest balance. An effective plan is one in which you pay as much as possible on the first debt while continuing to pay the minimum on all of the others. As you use your budget to guide you, you should be able to find extra money that can be directed to these bills.
This is probably the hardest piece of advice for most people to follow. When we say that you should cut expenses, we don’t mean that you should stop paying bills. Rather, we are encouraging you to look for the expenses that aren’t necessary and choose to cut those out of your life for now. For example, while you may enjoy cable TV, if you don’t have the money for it in your budget, then you need to cut it out. You need to go through your monthly expenses, look for any items that are not true necessities, and remove them from your spending habits. When you feel your determination failing, just remind yourself that once you are out of debt, you will be able to slowly add some of the enjoyable extras back into your budget.
Consider Credit Counseling
If you feel that you would benefit from having a professional review your finances and help you to figure out a budget for your personal expenses, then you should contact 360 Credit Consulting to learn how we can help you. Even if you haven’t tried any of the items listed above, we encourage you to contact us in Austin and let us show you how we can help you restore your credit score. During your free consultation with us, we will help you understand some of the ways that we can help you repair your credit score and achieve freedom from debt. Contact us today!