Debt can be a major problem in your life, especially if it is not managed well. If your income and expenditure don’t balance and you have more going out than you have coming in, then you’ll never get out of debt. It is time to take drastic action. It would help if you made a concerted effort to change your financial situation.
Here are seven ways that you can clear your debts.
#1: Review Your Finances
The first thing that you need to do if you are in debt is to have a full and thorough review of your income and expenditure. The chances are that you’ll have more coming out than you’ll have going in. That needs to change.
To address this, look at all of your non-essential spendings. How much of this can you cut? If you are ruthless and honest with yourself, you can probably get rid of most of it.
#2: Sell Unwanted Items
Take a look around your home and see if there are any unwanted or unused items that you can sell. The chances are that you have a lot of things in your home that you no longer need that have some value. Put these up for sale and use the proceeds to pay off a part of your debt.
#3: Switch Energy Suppliers
How much are you currently paying for your energy bills as well as your phone and internet? Many energy, internet, and phone providers will hook in their newest customers with the best deals possible. Then, they’ll slowly increase the prices. If you’ve been with your providers for several years, you can probably save a lot of money by switching to a different supplier.
Shop around for the best deals, but don’t forget that once the prices start sliding back up, it’s time to move on again. Use any of the savings to help clear your debts.
#4: Cancel Services
If you have a gym membership, when was the last time you visited the gym? Are you getting the full benefit of all of the different streaming services that you’re paying for? Are you paying for any other services that you don’t need?
Make a point of cancelling as many unnecessary luxuries as possible. If you have fewer outgoings, you can focus on getting your debts down quicker.
#5: Plan Your Spending
The chances are that your debt has been allowed to build up because you have not been managing your spending in an effective manner.
Now is the time to get into better habits with your spending. By doing this now, you’ll not only will you be able to help to manage your current spending so that you can afford to make your debt repayments, but you will also be changing your habits for the future.
Go back to your income and expenditure and create specific spending budgets for personal spending, travel expenses, and for your weekly grocery shopping.
Create shopping lists and meal plans so that you can accurately stay within your budget when you are shopping.
If you are strict with these budgets and only spend what you are meant to, then you’ll save money, which can go back into paying your debts.
#6: Consolidate Debts
If you have debt with several different companies and of a number of different types, then you might want to think about consolidating it.
By bringing all your debt together into one loan, you’ll be better able to manage your debt. You’ll have a definite end date, at which point all of your debt will be cleared.
If you choose to take this route and you are clearing credit card debt, don’t be tempted to keep your credit card open. Think about shutting the account down so that you’re not tempted to spend using it
#7: Get Debt Support
If you are struggling with your debt, reach out to a charity who might be able to offer you advice.
In the case that your debt has become too much, and you cannot afford to make your payments, you should always talk to the lenders and see if you can come to an arrangement. Failing this, you may need to think about Personal bankruptcy.
Bankruptcy is a major step, and it is not one that should be taken lightly. Be sure and get advice before making this decision.
Don’t Look Back
Once you’re free from debt, don’t look back. Remember the challenges of getting out of debt and avoid slipping back into old ways. Make sure you consider all of your spendings and only ever take out debt as a last resort.