How to get your debt under control for your future

How to get your debt under control for your future

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Finances are the number one worry that people have. And debt is often at the heart of that worry. It can be a huge weight on your shoulders, invading every aspect of your life causing a ridiculous amount of stress. With the average household owing upwards of $12,800, not including mortgages and student loans, debt is very real and can seem impossible to pay off. However, there are ways to manage your debt, pay it off and begin again with a fresh start.

Manage Your Debt

The first thing you need to do is to get your debt under control. So many people flounder under multiple debts and only succeed in missing payments and making things worse for themselves. If you have multiple debts then one way of creating an easier battlefield is to apply for unsecured debt consolidation loans for bad credit.  That way you only have to worry about one monthly payment, as well as one interest rate. It won’t suddenly clear your debt, but it lessens the stress by organizing your affairs. Another way to manage your debt – particularly if it is a smaller amount – is to contact a debt management charity.  They can help you create a budget, and, in certain cases can manage the payments for you, so that you pay the charity one set amount and they split it equally between your debtors. This doesn’t mean that your debt still won’t gain interest, but in some cases, it can be frozen for a period of time.

Regain Your Credit Score

Start doing this immediately, don’t wait until your debt has been paid off. In fact, paying off your debt in time will help your credit score. To do regain a good credit score you need to make sure you’re paying all of your bills on time. When it comes to things like car insurance, break it into monthly payments rather than having to find a big lump sum all in one go.  When paying for things like plane tickets or gas, pay for it on a credit card, and then immediately pay it off at the end of the month. Only use your credit card if you know you can pay it off, otherwise, you’re just digging yourself a deeper hole. If you find the right credit card, they come with extras like flight miles.

Cancel Subscriptions

Sit down and make a budget that you can live with. Make sure you have a little bit put aside each month for your savings. You will easily see where you are spending unnecessary money, bills you don’t need and things that you are paying more for than needed. Can you cancel your gym membership, or find a cheaper one elsewhere? Can you simplify your TV package by removing sports or movies? You may find that you’re paying for something you haven’t thought of for years, like a magazine subscription. Saving money doesn’t have to mean you can’t have luxuries, it just means moderating what you can have. Start switching take-away night for a new recipe night, or a cinema trip to a home movie night – a DVD and some popcorn is much cheaper than tickets to the movies. Plus you can pause the film for bathroom breaks.

Lose Contact With Credit Cards

Once you have paid off a debt, then say goodbye to that credit card. Cut it up and close the account. It will feel like such an accomplishment. If you want to keep a credit card to rebuild your credit score, then do, but keep the allowance small, and be 100% sure that you won’t dip into temptation. Think about switching to a new company, this way you are less likely to be offered a high amount, and you have no history with them, which might seem small but can help you start again mentally.

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