According to current estimates, Americans owe a total of $11.19 trillion dollars in debt. If you owe money and you’re wondering how to pull yourself out of the financial hole you’ve created, we’ve got you covered with the following 5 tips to pull yourself out of debt.
Scrap the card
If your credit card is the source of your debt woes, you might want to cancel it and depend solely upon the funds that you have available. Obviously, this is not always possible, but if it’s feasible for you, this is one of the first things you should consider doing. You’ll prevent more charges to your account and thus prevent more debt from being piled on top of your existing debt. So if you’re in credit card debt, scrap the card so you can begin to pull yourself out of debt.
Make a budget – and stick to it
If you’re serious about paying off your debt, set a weekly or monthly budget for yourself. Keeping track of how much you’re spending. Observing what you’re spending money on can help you to detect problematic patterns. Tally up all of the money you spend on things that aren’t necessary during a given time period, and resolve to cut them out of your next budget. Every dollar counts. Budgeting your expenses will help you realize this very quickly by putting things into immediate perspective.
Consolidate your debt
If you owe money to more than one company, consolidating your debt can help save you money in the long run. This practice consists of, basically, merging your debts together so that they are all covered in one payment. This can make your debt much easier to manage. The downside here is that consolidation does bring your credit score down. But if all that matters to you right now is pulling yourself out of debt then this is an option to consider.
Avoid impulse buys
Next time you’re thinking of upgrading your TV to the newest model, stop and think again: Is this really necessary? Weigh the possible pleasure you may derive from your purchase against the long-term consequences. If you save that money you’re thinking of spending, you’ll be well on your way to becoming debt-free in the long run, and eventually you’ll be able to make purchases like that without harming your wallet. It takes a bit of self-control to do this, but you’ll get better at resisting the impulses over time.
Negotiate for lower interest rates
If all else fails and you find yourself truly wallowing in debt, call up your credit card company and try to convince them to lower your interest rates. If you’re a good customer (pay your bills on time, actually use the card, have an improving credit score) then you may just get some relief from the credit card company. You have nothing to lose—the worst they can do is say no.