Do you feel like you’re falling into a pit of debt and it’s almost impossible to claw your way out of that mountain of bills? Instead of sitting on your butt and staring off into space yet again, you may want to try a really simple debt repayment strategy that just about anyone can follow. And yes, even you can do it.
Find Out Just How Much You Owe
Ok, I know it can be incredibly hard to face that demon, but it’s about time you finally faced the reality of just how much you owe. Fish out those old bills, and call the credit card company if you need to, just do whatever it takes to get the exact figure of how in too deep in debt you are. Yes, you’re probably thinking that there’s nothing worse than this, but just imagine yourself dead tired, standing in the middle of a dirty street , under the pouring rain, where all the taxi cabs are full, and with no money for a hotel or a good dinner. Yeah, it’s easier to add those bills isn’t it?
Curb Impulsive Spending
Now that you know how much you owe, it’s completely vital that you don’t add any more to it. Cut up your credit card if you have to, put it in the freezer, or give it to your dog as a chew toy. As an extra measure, make a bet with your best buddy or neighbor that for the next month you won’t spend on anything out of a pure impulse to buy. And if you lose, you’re going to have to do the dishes in his house for a week. Nothing’s more tiring than that right? The point is you need to identify your trouble areas and put barriers in place. Do what it takes to get the job done.
Determine the Amount You Can Use to Repay Debt
Now’s the time for some serious stuff. This is where you actually have to make a budget and find out how much of your income you can use to repay your debts. Once you’ve finally made a debt repayment plan, promise to reward yourself by eating in your favorite restaurant or by getting that one thing you’ve always loved. Let it be your last hurrah before finally being strict with yourself.
Here’s where you can finally put to action all those scenes you’ve seen in The Practice or The Apprentice (who said being a couch potato is all bad?) It’s important to realize that you can actually negotiate your debt with the bank or with the credit card company that you owe money to. In fact, these institutions would be happy to work with you since they are also interested in getting paid and you not defaulting on your payments.
Pay More Every Month
If you’ve finally taken the first few steps and have been slowly paying off some of your debts, you’ll find that your monthly obligations will slowly dwindle down since your balance is lesser and the interest that grows will also be smaller. Despite having less to pay every month, don’t retreat to your slacker self and still continue to pay the same amount that you initially did. If you continue to do this, you’ll be able to pay your debts faster and find yourself out of debt sooner.
Reconcile Your Savings
There’s always that age old question of whether you should pay off your debt first or if you should save or invest instead. The simple secret to that is to compare the interest rates between your debt vehicle and the savings or investment vehicle that you plan to use. If your credit card interest rate is at 9%, and your brother is forcing you to invest in a mutual fund with 7% interest, then all you have to do is simple math.
Even a 1st grader knows how to subtract and so should you. If you’re still wallowing in your debt mishaps and all the things that you have to pay off, just review the steps above and realize how completely easy it is to get out of debt. You know what you have to do. You only have to be disciplined to see them through. When in doubt or lacking motivation review your goals list and envision yourself checking off all your goals. Or you can remember our friend from IHOP.