Getting into debt is easy but getting yourself out of the hole of indebtedness is always the difficult part. According to a research on credit card user, one out of every eight Americans (the UK is similar) feels they will not be able to pay off their debt. Though it may seem scary, impossible, embarrassing and frustrating, with the right strategies you can work your way out of debt.
There are many guides out there, with many claiming to help you get out of debt immediately, the truth is without determination, and you cannot achieve this milestone. As an individual, you need to understand that debt is not peculiar to only you, even the government owes. However, you should not use it as an excuse to get into debt.
Know How Much You Owe
Knowing how much you owe goes a long way in determining how fast you pay off your debts, as it also helps you in thinking about an effective way of getting out of debt. This is probably the easiest as it may sound, but there is more to it than meets the eye.
If you are afraid of knowing how much you owe, there is no way you will know how much you should pay and when to start paying.
Gail Cunningham, a respected financial expert and the spokesperson of the National foundation of credit counseling (USA) disclosed that many people resists knowing how much they fully owe, because they are afraid of what they will find. In the remaining part of this article, we will be discussing three simple steps you can follow to get out of debt quickly.
Spend More with Cash Instead of Card
It is very easy to go cashless and shop with your credit/debit card, but spending with cash is a more subtle way to get out of debt. Another research carried on people spending with cards reveals that those who shop with credit card are more likely to spend more on luxury goods. This is because they feel they are paying with reserve or fun money.
The truth is when you hold cash you will be mindful of how you spend, because the money in your account is always higher than what you carry about.
Channel Your Energy on How to Make More Cash
You don’t need to focus on how you spend alone. It is important to spend more of your time thinking of how to add more money to the one you already have. You need to stay focused at work because stagnancy will only increase the debt you owe. You will definitely be free from debt but you need to keep the money flowing so you will not owe more.
Save Before You Spend
On a final note, you need to save before you spend. Saving your money before you spend helps you in staying focused on what you want. But spending before you save only makes it difficult for you to save, which will only land you in more debts. Make plans on how much you will spend and don’t exceed your spending threshold, urgent needs will take away important plans.
You also need to understand that paying off your debt is not just about knowing the right financial tools, but understanding the right psychological tools as well. Why and how you got into this debt is very important for you to be able to get out of it.