A lot of people are currently being enveloped in a web of debts and repayments that they practically don’t even know how to go about settling them. The gangly middle-aged man who has smiles all over his face might actually have some deep concerns inside that you don’t know since he won’t tell you.
Ordinarily, debts have a very debilitating effect on people and it has a very negative way of working on our psyches if we can’t quickly find a way out of them. The most concerning issue is, a lot of people in debt are not actually making efforts to get out of it. Most have simply given up and appear beaten in their quests to get out of the huge debt pile they are under. If you are one of those or you have been currently looking for a way to get out of debt in the past to no avail, we have put together a list of some of the easy steps you can take to finally get out of debt.
Step 1: Make a Budget (2 hours)
- Get a paper and a biro or you can use your personal computer to make a list of your proposed earnings and expenditures over a period of time under consideration.
- Use the list to create a budget which you must follow religiously over the period in consideration. Your budget should make provisions for how much you can spend on each household item. Every other expenditure you may want to make and it must be tailored to suit your income.
Benefit: Your budget would help in guiding your spending and expenditures and this would prevent you from engaging in unnecessary spending. Since you are able to control unnecessary spending, you would be able to save enough for your repayments.
Step 2: Start by Paying Off Debts with High-Interest Rates (30 minutes)
- The first thing to do is look through your debt profile and discover the interest rates each debt carries.
- Once you have done this, you should endeavor to single out the debts that carry high-interest rates and pencil them as the first to go as the debts with the high-interest rates could complicate things if not treated as urgent.
Benefit: Paying off the debts with the high-interest rates first would help you in getting rid of the excessive interest rates that could compound your debt profiles and this would go a long way in helping you in quickly repaying your debts.
Step 3: Learn to Say No
- You must make it a point of duty to say no to some desires and people to keep your spending down and take care of your debt needs.
- It is important you have a to-do list and whatever comes after then should not be attended to, no matter how tempting or persuasive.
Benefit: Learning to say no to some wants or demands would go a long way in helping you to save more towards the repayment of your debts. The moment you say yes to everything, you would be unable to save enough and this would have a negative effect on your finances.
Step 4: Cook Your Own Meal (2 hours)
- You should make a list of your grocery needs from time to time and stock your kitchen in order to cook your meals at home without much hassle.
- Make enough time from your tight schedule and make it a point of duty to cook meals that would last you for some time (probably the whole week) and take your own food along with you to work daily as this would stop you from spending on restaurant foods.
Benefit: Cooking your own meal would help you in saving loads of money as opposed to eating at fancy restaurants. If you must repay your debts, it’s important you learn how to save more money and this is one of the surest ways to do that.
Step 5: Stop Investing in Cable Television (30 minutes)
- You must get your priority right and determine what the benefit of subscribing to cable television is to you.
- You should look at how much you spend on cable TV in a year and how much of it you actually watch due to your job commitments. After determining how much you pay and comparing it with how much time you actually have to watch them, you can make your decision.
Benefit: Cutting your subscription to cable television could actually help in saving you thousands of dollars yearly and if you put that extra cash towards repaying your debts, you would definitely be better for it.
Step 6: Plan Every Shopping Before Stepping Out (30 minutes)
- Get a book and pen and write a list of everything you need to get when going out shopping.
- When putting together your shopping list, make sure it covers everything you consider important ahead of your outing. Once this is done, hold on to it and let it be your guide while shopping.
Benefit: Planning your shopping before heading out would prevent you from panic buying. Panic buying could make you spend much more money than you have planned to spend and the worse thing is most of the spending could end up being unnecessary. Prevent this today by taking a few minutes out to plan your shopping list before heading out and save important money towards repayment of your debt.
Step 7: Look for Avenues to Make More Money (30 minutes)
- You should spend some time daily to deliberate on new ways to make money.
- Once you have developed an idea, work on it and create a suitable business plan to help in facilitating such an idea and turning it into a business that brings in money.
Benefit: To get out of debt, you need more money. The reason you are in debt in the first place is that your current income can help in sustaining the repayable and the best way to overcome this is to make more money through any profitable business venture. The additional revenue would do a lot in helping you in repaying your debt.
Step 8: Improve Your Financial Skills (1 hour)
- You should dedicate some time to studying on personal finance skills or seeing some financial experts to put you through the basics of personal finance.
- Once you have an idea of personal finance, you can start applying it on your everyday dealings. From spending to saving and investing, the knowledge would come in handy.
Benefit: Personal finance knowledge would give you a wide new horizon on how to handle your finances better and guide against waste and unnecessary expenditures. You would know how to invest, where and when to invest and all of this would help in creating revenues that would go a long way in getting you out of debt.
Step 9: Break up with Starbucks (20 minutes)
- Quickly look through how much you spend on buying coffee at Starbucks and compare to how much you would spend making your own coffee.
- Starbucks is great but you would end up saving a lot by making your coffee at home. Once you have discovered how economical it would be to make your own coffee at home, start working towards doing that.
Benefit: Making your own coffee at home would help you in saving a lot of money which could end up being a considerable part of what you could use in repaying your debts.
Step 10: Shun Expensive Hobbies (20 minutes)
- Run through your hobbies and compare it with your income.
- If you discover a hobby you currently engage in is deemed luxurious and would eat too much into your revenue and get so far away from the hobby for the time being and save the money that you are supposed to spend on it.
Benefit: Steering clear of expensive hobbies would help you in saving a lot of money which you actually need right now. You could try some other hobbies that are not as expensive in the meantime until you are totally free of debt.
Step 11: Avoid Paying too Much for Accommodation (30 minutes)
- It is important that you engage in self-appraisal and determine if you are paying too much for accommodation right now.
- Do a thorough study and access your options. Is your current accommodation suitable or too expensive for your current revenue and debt profile? If you think you are paying too much for accommodation, you must make the bold step to sell off your lease and get a new place that is suitable to your finances and debt profile now.
Benefit: Cutting down on your accommodation cost could be very uncomfortable now as you may have to make do with something that is not as glamorous or move to an area that is not as exotic, but it would help you in saving a lot of money and you need that right now more than anything to be free of debt.
Step 12: Pawn off the Car (2 hours)
- Do a thorough analysis of how much it costs you to keep your car running.
- After doing the analysis, it is important you compare it to how much it would cost you to ditch it and make do with public transport now. Mostly, it should be much more affordable to use public transport for your needs and as a result, you should look towards the right options to sell off your car.
Benefit: This would most definitely be difficult, but it is a sure way to get some quick funds and it would also help you in saving a lot of cash that would have been directed towards the maintenance and operations of the car in the first place and that is why you must do it.
Step 13: Negotiate Lower Interest Rates (30 minutes)
- Look through your list of repayable and consider which ones have high-interest rates.
- Single them out and approach the principals to negotiate lower interest rates if possible. These things are not easy. It may require some conditions be met before it can be done. However, once you are sure the conditions are better compared to the current situation, you can agree to them as it would help a lot.
Benefit: Interest rates are one of the reasons some people find it hard to repay their loans that have accumulated into huge debts. If you can find a way to negotiate a lower interest rate, you should commit to this as it would reduce the amount you are supposed to repay.
Step 14: Stop Accumulating more Debt (30 minutes)
- Look through your current debt profile. Discover how much you have to pay and how soon you are expected to pay up.
- After doing this, you should make sure not to fall into further temptations of acquiring more debt. Make sure you design ways to live within your current means by all means and eschew borrowing until you have settled the current debt.
Benefit: It is a must you avoid further debt by all means as it is the best way for you going forward if you wish to get out of debt. Acquiring more debt would put more pressure on you and curtail all the efforts you have put in to get out of debt since it would only be aggravating your situation and it could negatively affect your psyche and this is why you must avoid it by all means.
Step 15: Get Professional Advice (2 hours)
- Try and check out some of the financial experts and debt management professionals around you.
- Reach out to them and discuss how they can be of help. You should try and commit to either a daily, weekly or monthly visitation to such expert until such a time when you can find a breakthrough in effecting the repayment of your debts.
Benefit: Seeing a professional or getting their advice would play a huge role in facilitating your getting out of debt. The truth is, you can’t do it all alone. These professionals are well trained to handle situations like this. Approaching them for advice and direction would give you the needed information and strategy to handle your situation and overcome it in a short period of time.
Getting out of debt could be daunting. Tackling your debt problem with the tips given above would not only get you out of debt but provide a platform for you to be financially stable going forward.
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