What ever you owe you need to pay back and with interest. This is the rule of debt game. Once you are in the game, you need to follow the rule. You need to help yourself if you want to get out of debt. Debt reduction always begin at home and you can get rid of your debt even without the need of professional debt help services if you debt issue is not serious. Here are the steps to handling your debt on your own.
Step 1: Track & Control Your Spending
Before you even get started your debt reduction plan, you need to first look at your spending habits. If you use to spend more than your income then the difference between your spending and your income will be added to your debt. This type of spending behavior will create and add more new debt into your existing debt balance month by month and day by day and very quickly it will snowball to a big debt ball that will drag you into a serious debt trap.
In order to control your spending, you need to know where your money goes. The best thing to understand your cash flow is to write it down. List down all the expenses and categorized them to “must spend” such as mortgage payment, utilities, insurance payment, groceries and “non-essential spending” such as movies, the purchased of branded shoes and clothes, luxury vacation & etc. You will be surprised how much you have paid for the “non-essential” items. Hence, the first step in your debt reduction plan is to cut down those “non-essential” expenses so that you have extra bucks to pay into your debt. Changing your spending habits may be hard but it is need to make your debt reduction plan a success.
Step 2: Get Rid Of Reduce the Use of Credit Card
Research result shows that most American households are in debt due to uncontrolled uses of their credit cards. The credit card creates a convenient cashless buying environment that can cause many people to overspend without considering their repayment capability. So, if you really want to get out of debt, first thing is to get out from this comfort spending and paying environment. If at all possible, you should never charge on your credit cards. If you need a card for convenient paying and without the need to carry too much cash with you; then, consider getting a debit card which you can only spend the amount in you checking account.
Step 3: Spend Less & Save More
After changing your spending habits and get your credit card in control. The next thing you need to do is try to cut down your current expenses if possible to squeeze extra dollars for you debt payment. Look at your expenses like clothing, restaurants, movies and other non-essential purchases; these are the items you need to cut back on in you debt reduction plan. Remember, if you want to get out of debt, you are going to have to make some sacrifices. Reduce the frequency of going for movies, taking dinner at restaurant or buying new clothes. Every dollar you save from this non-essential spending, you can put towards paying off your debt.
You need kick start a debt reduction plan if you really want to get out of debt. And you could always start from home by looking at your spending behavior, credit card usages and cut down of any unnecessary expenses. The more dollars you put towards clearing your debt the faster you will get your debt pay off.