Employing a debt settlement firm to negotiate a payment for less than what you owe is a painful and stressful process. It also has a detrimental effect on your credit rating. Therefore, you should consider it only as a last resort before declaring bankruptcy. Before you get to that point, consider getting out of debt completely. The benefits of this are obvious. You keep much more of your income, you save more and you have more capital to do the things you want to do. Here are a few tips that will help you stop writing monthly checks to credit card companies. Stop borrowing money – There really is no way around this. If you keep borrowing money, you’ll never get out of debt. The advice to live within your means may sound cliche, but there is a reason for it. When you buy things on credit, you essentially end up pay more than the item costs. Eventually, you must pay for the things you buy with credit. When that time comes, you’ll be forced to live within your means no matter what.
Document your spending habits – At the end of the month when you are not left with enough money to pay for the important stuffs that is when the problems start to arise. You start borrowing money from friends, take advances, the amount of debt increases, your bills are outstanding and you come under a constant vigilance of your creditors. Life will never seem more hopeless and impossible. The only solution to this is keeping a track of your expenses when the time is right. When you write down exactly where you money goes, you have a much better idea of which expenses you can realistically eliminate. Write a game plan – Before you start tackling your debt, you need to know how you’re going to do it. Simply paying the minimum monthly payments won’t get you out of debt, ever. Gather up all your bills and figure out which debt you can pay off first. When you pay off that debt, use the money you would have spent paying that one to pay back the next one. The more you start paying off, the more money you’ll have to throw at the next debt. Taking it one step at a time will give you an important feeling of accomplishment and moving forward that is essential to getting out of debt.
Use a budget – Armed with your documented spending habits and a game plan to get out of debt, you need to write out a monthly budget that you can stick to. Will power is the most essential portion of sticking to a budget. If you haven’t budgeted money for your daily latte, don’t buy it. You should be realistic about what you can do without, and you’ll need the support of everyone involved in your financial life. Otherwise, your budget is nothing more than figures on a piece of paper. Increase your income – This is possibly the biggest obstacle you’ll come across. If you want to get out of debt faster, you need more money to throw at your debts. Aside from eliminating unnecessary spending, earning more money is the only other way to get more cash to pay down your debt. You can accomplish this by taking on additional employment or selling some of your possessions. There are other creative ways to bring in additional income. Everyone has something unique that they can take to a market, so think about what yours might be. Most of these suggestions are common sense and generally don’t take anything more than a pen, pencil and an extraordinary amount of will power and a desire to break free from debt to accomplish. You can become debt free. The only thing standing in anyone’s way is the absence of the true desire to do it.
