Most financial experts say that it’s very easy to get into debt but very hard to get out of it. It’s possible to accumulate a large amount of debt in a few weeks or months that will take years to pay off. Therefore, it is best to spend wisely.
While there are many ways to get in debt, the most common cause is credit cards. If you find you’ve amassed a huge amount of debt, it’s important to pay it off as soon as possible. Here are eight easy debt advice tips that can help you get out and stay out of debt.
Work it out
Figure out how much you owe. If the total amount of your debt exceeds 20% of your net income, you’re in danger and should do something to pay it off. Many people don’t want to believe that they are in debt. They take out one loan and use it to pay off other debts. That doesn’t do anything to help their situation because they will just be moving their debts from one creditor to another. A better option than just moving your debt is to consider debt settlement.
Once you know the exact amount you owe, you can come up with a budget that should include a schedule for repaying your debts. You should be as realistic as possible. If you have amassed too much debt and you are having trouble paying it off, don’t hesitate to choose debt arbitration. There is no shame in choosing the debt arbitration option. After all, you would be able to clear your debts and live a debt free life.
Don’t accumulate more debt as this will only make matters worse. Wait until you’ve paid off your current debts before adding any new ones.
Reduce your daily spending
This applies mostly to shopaholics or the kind of people often buys things they can’t afford. Try to reduce your daily spending or limit your spending to the most essential things.
Pay all your utility bills by direct debit as opposed to paying them with a credit card. When you pay using your credit card, you’re only increasing your total debt. On the other hand, when you pay your bills using direct debit, you may qualify for some discounts.
Switch to a cheaper credit card
There are very many credit card companies. If you shop around, you should be able to find a credit card with a lower interest rate than what you are currently paying. The same case applies to loans. If you can find a cheaper alternative, don’t hesitate to take it up. You should be careful about special offers on credit cards and loans. This is because the rate on these loans may increase considerably after an initial interest free period.
Switch your mortgage
Your biggest monthly expense is probably your mortgage payment. This makes it very important that you have the best deal. If the interest rate on your current mortgage is high, you should consider re-financing. In so doing, you would be able to take advantage of the low interest rates offered by other mortgage providers.
Although there are very many ways to get out of debt, there are people who just can’t because they owe too much. If you are in such a situation, don’t lose hope. Debt settlement is your best option to get out of debt. It involves finding a reputable debt settlement company that can negotiate settlements with your creditors. The main advantage of debt settlement is that part of your debt will be written off in exchange for a one-time lump sum payment.