It is actually quite straight forward to get out of debt. There are two things that you should improve if you want to achieve this goal. Earn more money and spend less of it. Better still, combine the two - earn more and spend less of it. This will help you reduce your debt even quicker.
You're probably saying, gee thanks for nothing, tell me something I didn't know. The problem with this and any strategy is having the discipline and patience to follow the it through to the end.
Most people in debt probably acquired this debt over an extended period of time. It could be up to or more than two years that they spent money impulsively and didn't care to budget. Then all of a sudden their debts hit a critical point and they want to get out of debt fast.
So why should getting out of debt take weeks if the initial problem might have taken years to create. It won't happen. In fact, it could take years to solve your debt problems. The important thing is to start to chip away at the debt mountain and then stick at it. By chipping away at the mountain, one day it will crumble.
And this analogy holds true for getting out of debt. The more you persevere, even if it seems hopeless, the quicker the momentum will build until the debt mountain crumbles. Or more specifically, once you are paying off the compound interest each month and also eating into the capital amount that you borrowed, the debt will reduce at a faster pace.
So, if we start with making more money what can be done ? People work long hours already so it's not sensible to take on another job or is it ? This is a decision you can only make for yourself. A second job may bring you more income but you may sacrifice your health if you push yourself too hard.
If you can make money from something you enjoy, like a hobby, then this is probably manageable as a second job. However, working a normal job and then working in a bar is probably not a good idea of a second job (unless making cocktails is a hobby).
Or you might consider having a home clear out and selling all the stuff you no longer need. Have a garage sale or stick the items on Ebay. You might not make a fortune but it can certainly help towards your debt problem.
Having said this, finding good ideas to make more money is probably far more difficult than finding ways to spend less of the money you already make.
Many people in debt don't have a budget. They have no idea how much they have to spend each month and no idea what they spend their money or credit on. This is the first step to reducing your spending and getting out of debt.
Establishing how much you have to spend each month should be easy. It's your monthly paycheck plus any other sidelines that you have going. Remember to allow for tax if your employer is not already taking this out or you may get another unwanted debt at the end of the financial year.
Now sort out how much you spend. Record every transaction over a month. You want to divide these expenses into essential and non essential expenses. Essential expenses are things you must have in order to survive. So food and a place to live are essential expenses. Other items may not be essential and can be scrutinized more carefully.
Having said this, you may be living above your means. Maybe you could get cheaper accommodation ? Do you eat all the food you buy each month or do you throw things out. Do you waste food ? This may be a way to save money.
Non essential items are things that fall into the category of entertainment. Sure it is important to have an outlet after work but are you overdoing it. Can you cut back on entertainment costs. These should be the first things you look at.
You're probably saying, gee thanks for nothing, tell me something I didn't know. The problem with this and any strategy is having the discipline and patience to follow the it through to the end.
Most people in debt probably acquired this debt over an extended period of time. It could be up to or more than two years that they spent money impulsively and didn't care to budget. Then all of a sudden their debts hit a critical point and they want to get out of debt fast.
So why should getting out of debt take weeks if the initial problem might have taken years to create. It won't happen. In fact, it could take years to solve your debt problems. The important thing is to start to chip away at the debt mountain and then stick at it. By chipping away at the mountain, one day it will crumble.
And this analogy holds true for getting out of debt. The more you persevere, even if it seems hopeless, the quicker the momentum will build until the debt mountain crumbles. Or more specifically, once you are paying off the compound interest each month and also eating into the capital amount that you borrowed, the debt will reduce at a faster pace.
So, if we start with making more money what can be done ? People work long hours already so it's not sensible to take on another job or is it ? This is a decision you can only make for yourself. A second job may bring you more income but you may sacrifice your health if you push yourself too hard.
If you can make money from something you enjoy, like a hobby, then this is probably manageable as a second job. However, working a normal job and then working in a bar is probably not a good idea of a second job (unless making cocktails is a hobby).
Or you might consider having a home clear out and selling all the stuff you no longer need. Have a garage sale or stick the items on Ebay. You might not make a fortune but it can certainly help towards your debt problem.
Having said this, finding good ideas to make more money is probably far more difficult than finding ways to spend less of the money you already make.
Many people in debt don't have a budget. They have no idea how much they have to spend each month and no idea what they spend their money or credit on. This is the first step to reducing your spending and getting out of debt.
Establishing how much you have to spend each month should be easy. It's your monthly paycheck plus any other sidelines that you have going. Remember to allow for tax if your employer is not already taking this out or you may get another unwanted debt at the end of the financial year.
Now sort out how much you spend. Record every transaction over a month. You want to divide these expenses into essential and non essential expenses. Essential expenses are things you must have in order to survive. So food and a place to live are essential expenses. Other items may not be essential and can be scrutinized more carefully.
Having said this, you may be living above your means. Maybe you could get cheaper accommodation ? Do you eat all the food you buy each month or do you throw things out. Do you waste food ? This may be a way to save money.
Non essential items are things that fall into the category of entertainment. Sure it is important to have an outlet after work but are you overdoing it. Can you cut back on entertainment costs. These should be the first things you look at.
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For ideas on how to save money and get out of debt see http://www.bankruptcyfixup.com/
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