Well its that time of the month again [Editor's Note: We were wondering why you were acting so cranky!], time to fork over that money to pay those credit card bills! I always hate doing it, because my bank accounts looks so pitiful afterwards and it depressing. Every time I finally get a little bit in the bank I have to give it away. So it got me thinking, how did I get so far in debt in the first place and why for the life of me can I not remember what I spent all that money on?
Now everyone says its easy to get out of debt, just stop using your credit cards, but come on! Its not that simple. If it were, then everyone should be out! So I was pondering "what did I swipe my credit cards on?" I could only remember of a couple of things and everything I thought of was a want, not a need. I didn't need to to purchase that item, but I wanted it! And that instant gratification that came with it right after buying it. But as quickly as the gratification came, the quicker it went away. Only leaving me with a large sum to pay back.
The experts a.k.a. my parents always say "Only charge what you can pay back!" In my younger days, I thought what's the point of that?! If I have enough for it right now, why not just use the money I have right now? I'm gonna swipe that plastic on something I can't afford and get what I couldn't get right NOW!!!! After a few short lived months, I realized that wasn't the best of ideas, because now I had to pay back all that money I had to borrow. So then I changed the way I thought to, well if I can pay it back by the end of the month I'll be alright, but my paycheck math was never correct and I always ended up forgetting to factor in spending money on food and gas. Also those credit card companies are tricky, they always throw you these small ass minimums, nice little security blanket for people. If I can just pay the minimum I'll be alright! But sadly that is what they want you to do, because if you keep using the cards while just paying the minimum you'll never be out of debt! So I have now come to the decision; I NO LONGER WANT TO BE IN DEBT!
That's why I thought up some steps to help get me and hopefully YOU out of debt!source
Step 1:Acknowledge that you have a problem. You can't fix the problem if you don't realize you have one. Once you have come to terms and realize that there is a problem you're one step closer to getting out of debt!
Step 2: STOP USING YOUR CREDIT CARDS! You can't build up more debt if you stop creating it! Just stop using them. Cut them up, burn them, destroy them, hide them! Does the expression "out of sight, out of mind." right a bell? If they are not there to see, then soon or later you will stop thinking about using them. Think of your credit cards as the shovels that are digging your grave. By using them frivolously, you're digging you're own grave.
Step 3: Make small cut backs. Now that you have stopped using your credit cards, you need to start using and spending your money more wisely and the first thing is to stop spending your money on items and services you don't really use or need. Cancel that membership to the gym you never go too, don't eat out as much, do you really need those manicures and pedicures, stop buying those $4 Half-Mocha Cappuccino Iced-Tea Lattes, wash your car yourself, buy store brands items, etc. Just cutting out these small things can help save hundreds, maybe even thousands a year!
Step 4: Start saving money. Open up a saving account and start putting atleast 10% of each check in there. It might not be much now, but a little adds up to a lot after awhile. And trust me, once its starts looking like a nice number, having all that money in the bank is a moral booster!
Step 5: Put all of your bills together. Putting all of your bills together in one area allows you to see how much you are in debt by. Having a solid number is always handy and knowing exactly how much you owe and how much you need to pay each month on each bill allows you to take better control of the situation.
Step 6: Have a plan on how much you plan to spend between paychecks. Now me personally, I try to spend as little as possible between paychecks. If I can spend $0, then I'm going to try to do that, but that's never realistic. So I always set aside a certain amount for food and gas. The basic two things I need to get by in the week to make sure I have more than enough to put towards my credit cards. Now for you set it up for your lifestyle, make sure you set enough for your monthly bills, groceries, gas, eating out, and other things you might need to get done during the week.
Step 7: Control your spending. After setting up your plan, you might find it hard to keep to at first, but do what I do. The things that need money first always get paid first. My savings account is always the first thing to get paid. Then I take a chunk out for my bills, then I just keep going down the ladder based on importance.
Step 8: Always pay your bills on time! There is nothing worst then having to pay late charges. So pay you bills on time or before they are due. If you follow this, then that's one less thing you have to worry about. Also not paying your bills on time has consequences; like raising your interest rates, lowering your credit score, making your bills even larger than before.
Step 9: Start a debt snowball. I'm sure you have heard of the snowball effect? Well apply that methodology to your debt. Now that you have started to gain control of your finances, see where you can finds some extra money, like $50 or $100. Now with this extra money you are going to use it to start helping pay off your debt. Order your bills from smallest to largest. Now with your smallest bill, pay the minimum plus that extra money you found and continue doing that until that bill is paid off. Then take that money you were using to pay off that bill and apply it to the next until that one is paid off and just keep going in that fashion until all of you debt is paid off.
Step 10: See where you can make larger cuts. Now that you have started with the snowball effect, see if you can find places where you can cut more money to add to your snowball. Sell your car for something smaller and more fuel efficient, find a smaller apartment/condo/house, pick up a roommate, or move back home with your parents.
Step 11: Find other sources of income. Nothing helps lower your debt faster then earning more money. Take a couple of minutes and brainstorm on different ways you can make more money. Ask for a raise, start a business, sell things on ebay, get another job, anything that can help bring in more money than before.
Step 12: Have fun and celebrate! As soon as you're out of debt celebrate! have fun (with in modesty)! You deserve it after working so hard to get out of debt and working towards getting out of debt! Try and find things you can do for free, make it a game, and win the game!
