Getting into debt is easy and worrying about it won’t do much in relieving you from your debt. The best you can do when you have already run into debt is to start working towards reducing or clearing the debt and staying out of debt in every possible way. You can find your own strategy to deal with the debt,but there are several DIY debt reduction strategies and tips you can use to get over your financial woes.
1. Evaluate the debts. Start by collecting all financial documents and printing credit reports so you know exactly where you are with the debts. Most times people get scared just thinking of how hefty the debts are but you will never know until you take the courage to evaluate the debt so you can start somewhere with the recovery. Include all personal loans,auto loans,credit cards and payday loans in this evaluation.
2. Check your current earnings and budget. With the clear debt information,you then must start working towards debt reduction. Calculate the monthly income you get after taxes and basics like mortgage or rent,groceries,utilities and insurance. This way,you will get to find out how much you can spare for paying off the debt.
3. Find ways to increase pay off amounts. Sometimes when you subtract all basics from your income,you might find that you have very little amount left you can use on the debts. If the amount is too small,try and come up with ways through which you can reduce spending. Carpooling is one of the temporary methods you can use to cutback the expenses.
4. Create a plan. Now that you have some money to use on the debts,create a plan of how you are going to handle the debts and pay off. Will you start with one debt or pay a little every month for every debt you have? You might find it helpful to start with debts with highest interest rates or highest balance.
5. Negotiate repayment with your lenders and creditors. Agreeing to negotiate terms will be a plus to your credibility and your lenders or creditors will be more than willing to strike a deal with you.
6. Keep up with the debt reduction plan. Commitment is your only ticket out of debt so keep up with the plan.
7. As you continue with the repayment plan,avoid adding any more debts on top of what you already have.
8. Find better ways to deal with your financial issues besides getting loans. You can for instance,avoid making purchases for those that are not urgent.
9. Leave your credit card at home when going out unless you are going shopping. It will keep impulse buying at bay. In case you are going to shop,make a list of everything you need and stick by it no matter how tempting things in the store appear.
10. In case you take up a loan again,be consistent with your repayment and avoid piling loans. Try and have one loan at a time.