Home » How to overcome debt
How to overcome debt

How to overcome debt

Introduction

If you’re feeling overwhelmed or frustrated about your debt and don’t know where to start, this post is for you. We’ve all been there. You wake up one morning, look at your balance sheet, and think: “What on earth am I going to do about this?!”. If that’s what you’re feeling right now, here are seven simple steps we suggest taking in order to make some progress toward getting out of debt and staying financially healthy. Here is our guide on how to overcome debt.

1. Look at your debts

In order to understand how much money you can save by paying down your debt, it’s important to know exactly what counts as debt, and how much money each of these debts costs.

  • Credit cards: Your credit card balance is the total amount owed on all cards (not including any interest charges). If you have more than one credit card with an annual fee, add up the amounts owed on them separately before adding them together.
  • Student loans: The total amount of any student loan(s) that are in repayment or have been forgiven should be calculated using current rates for monthly payments for each borrower’s class period-based repayment plan (if applicable). This includes federal loans like Stafford Loans and Perkins Loans and private student loans offered through banks or other lenders who may offer variable rates based on market rates at the time of borrowing. However, if those institutions are no longer offering those types of services then they’ll disappear from existence like vampires Dracula would if he was ever turned into dust after being burned alive at stake.”

2. Stay organized

If you’re like me, your bills and receipts are scattered across the computer. It can be so easy to lose track of what’s coming due when you don’t have a system for staying organized.

There are many different ways to keep track of debts and bills. But I prefer using an app called YNAB (You Need A Budget). This is an excellent tool that allows me to see all my accounts in one place and make automatic payments from there.

The next step is creating a spreadsheet or budgeting app on your phone that keeps track of every dollar you spent throughout each month as well as how much money has been set aside for savings purposes. This way if something unexpected happens (like losing your job), it won’t completely derail everything else going on in life!

3. Start a written budget and tracking spending

  • First, you’ll want to create a written budget.
  • Next, you’ll need to track your spending! So you can see where the money is going and what the impact of each purchase has on your overall budget.
  • There are plenty of Apps and online tools that can help with this task. Some even have templates for creating your own budget!
  • If you don’t have an existing way of tracking spending yet (or if it’s been awhile since last time), consider using one or another of these options: Mint (free), Personal Capital (free), YNAB (free).

4. Identify your problem areas

If you want to overcome debt, it’s important to identify your problem areas.

  • Problem area 1: You don’t have enough money for basic needs. For example, if you’re living paycheck-to-paycheck and can’t afford your bills on time every month, then this is a problem area for you.
  • Problem area 2: You’re living beyond your means and overspending so much that it feels like there’s no end in sight (or ever). For example, maybe one weekend out of every two weeks someone comes into town from out of town and brings their kids along with them — which means that during those weekends we’ll be eating dinner at home rather than going out somewhere nice while they’re here? Or maybe they come every weekend because they’ve got some major projects coming up around town? This may not seem like an issue right now but let’s say that after five years we’ve saved up enough money to buy our first house together but then we realize that we still need another $1000 extra per month so that we can afford it. Then what happens when those savings run out? That would be a serious problem area!

5. Put all your extra money toward debt instead of savings

  • Put all your extra money toward debt instead of savings.
  • Don’t save money. If you do this, it will make your debt even worse and cause you to have less money in the future to pay for your debts.
  • Save some of what you earn! So when it comes time for repayment, there will be more than enough saved up for it. Unless something goes wrong!

6. If you’re married, get on the same page about money and debt

If you’re married, it’s important to get on the same page about money and debt. You need to have a plan that works for both of you. So everyone knows what they can afford and what they need. You also want to be on the same page about your spending habits. Like if one partner is more responsible than another (and especially if there are children involved), then it’s important for both partners’ salaries or incomes not only be equal but also fairly matched so as not to create any financial inequality between them.

7. Pay more than the minimums due

If you’re only paying the minimum due, you’re missing out on a lot of money. You can pay more than your minimums and still get out of debt faster.

Here’s how:

  • Increase the amount that goes toward paying off your debts each month by making an extra payment or two. For example, $25 instead of $10. This way, even if it takes longer to pay everything off at once, there will be more money coming in each month from which to afford additional expenses like groceries or gas so that they don’t keep adding up.
  • Find ways to make extra payments outside of just writing checks. Like through automatic deposits into savings accounts or using credit cards for small purchases instead of using cash or debit cards. Because then those funds are immediately available for other things such as keeping up with loan repayments and making payments on other debts like student loans.

8. Pick a repayment strategy

Once you’ve identified your debt, there are several ways to tackle it. The first is to pick a repayment strategy based on the interest rate and balance of each account.

  • Pay off the highest interest rate debt first. Even, persons with multiple debts can use this method. It’s also effective for those with limited income or credit history who have high monthly payments due to more expensive purchases like cars or college educations. By choosing this option, you’ll be able to save money on interest charges over time. But remember! If you don’t make enough monthly payments during that period, then all those savings will go right down the drain!
  • Make small payments toward each account. A less extreme option than paying off everything at once would be making regular payments toward each account. So you don’t leave yourself drained completely before tackling another one of your debts. However, this may not work well if there are other factors influencing decision-making such as emergencies or unexpected expenses.

9. Avoid debt in the future

The best way to avoid debt is by living within your means. If you can afford it, pay cash for purchases and avoid credit cards. Credit cards have interest rates that are often much higher than what you could get with a bank loan or savings account. They also come with fees and penalties if you don’t pay them off in time. Sometimes they’re even worse than regular loans!

If you do decide on a credit card, make sure it has low annual percentage rates (APRs). So you aren’t paying too much interest over time on your balance payments each month. You should also consider applying for one with an introductory 0% APR offer. These usually last no longer than three months before jumping up into their standard rate structures again. But they can help get rid of any bad feelings associated with carrying debt while trying not spend too much money out at restaurants or shops that might put themselves above others’ needs.”

Take these steps to eliminate your debt and stay financially healthy

  • Pay more than the minimums due. If you’ve got a lot of debt, it’s better to pay off your smallest balances first. Even if that means charging up some credit cards and taking on new high-interest ones. You’ll feel much better about yourself when all your debts are paid off!
  • Pick a repayment strategy that works for you. Some people like to pay off their smallest balances first, while others prefer tackling their biggest bills first. It’s totally up to you which way works best for you!
  • Avoid debt in the future by making sure there aren’t any surprises coming from unexpected purchases (like a new TV) or emergency expenses (like car repairs). If possible, write everything down so there are no doubts about what needs paying back when crunch time comes around again.
  • Stay organized by keeping track of everything related to money: bank statements, credit card statements and bills etcetera. You’d be surprised how much clutter accumulates when we’re busy doing other things besides thinking about our finances! We tend not only keep track ourselves but also help others stay organized too because together we make sure nothing slips through unnoticed…

Conclusion

We hope you’ve enjoyed this guide to getting out of debt! These strategies aren’t always easy, but they can be effective. This will help you feel happier and more optimistic about your future. If you have any questions or concerns about your finances, we recommend speaking with a professional who can give expert guidance on how best to manage your money.

Read More How to make money and side hustles

Author

0 0 votes
Article Rating
Subscribe
Notify of
guest

0 Comments
Inline Feedbacks
View all comments
0
Would love your thoughts, please comment.x
()
x