By Getting into debt seems like an effortless nightmare that sneaks up on you when you least expect it. The problem is, sooner or later, it catches up with you. Not only that, but getting out of debt is never as easy as finding yourself drowning in financial obligations. Don’t worry, it’s not an unbeatable foe; there are a few different approaches to debt consolidation and managing your finances.
Do Your Homework
The first place to start is to sit down with all of your bills and figure out a budget. There is an approach to budgeting called the 50/30/20 plan. The premise of this budget plan is once you figure out your income, 50% goes to living expenses. Then 30% you use for things you want to buy and the remaining 20% goes towards paying off your debt and/or savings.
By allowing yourself money for wants you are keeping a realistic approach to spending your money on things outside needs and holding yourself accountable for those expenditures. Keep in mind, any plan is only good if you make sure you stick to it. If you are especially dedicated to attacking debt, you can spend some of your allocated “wants” money on your debt. If you need a bit more guidance, the experts at Hawkeye Associates can help you along your journey with a debt consolidation loan.
A debt consolidation loan allows you to combine all your credit card bills into one easy-to-manage monthly payment. Since this loan will typically have a lower interest rate than your current cards, you’ll save money over the life of the loan as well.
Extra Income
Obviously, the best way to pay off debt quickly is to pay as much money as you can towards eliminating those balances. Unfortunately, that’s not always as easy as it sounds. Because you already set up your budget, you know exactly how much income you have to work with. Consider ways to bring in extra income. Getting a second job is one answer. If you are able to find something that coincides with your schedule and responsibilities, there are still only so many hours in a day.
There are other things to help increase your inflow of money. When you clean out your closet, instead of just bagging it up and sending it to your local donation center, have a second look to see if any of those items could be worth money. If so, you could take them to a consignment shop, sell them on a third-party vending site like Poshmark or Facebook Marketplace or you could set up listings on eBay.
You could also look around your home and see if you have any items that you don’t use that could bring you some extra cash if you sold them. Don’t fall into the false sense of security that selling off your belongings is the best approach. Sooner or later you’ll run out of things to sell and if you sell things you still need, you’re doing yourself a disservice because sooner or later, you’re going to want to replace them.
Think about your full-time job; is there room for promotion? With promotion comes additional income. If that’s not an option, have a look to see if there is another job that pays more and possibly has a more eminent opportunity for upward mobility.
Call Your Creditors
If debt is further along than you can manage, reach out to your creditors. See what help they can offer you. Oftentimes if you communicate that you need help with repayment, they will work with you to set up a payment plan. If you keep up with the new payment plan, it will keep them from sending your account to collections. Staying out of collections will keep your credit from being adversely affected any more than you’ve already done.
Getting out is never a fun thing to do, but with the right approach and dedication, it’s attainable.
