There are a lot of nasty 4-letter words but could debt be the worst? It could be if you’re having a serious problem with it. People who are buried in debt can actually suffer physical problems such as headaches, ulcers, an irregular heat beat, insomnia and even more. For that matter, trying to deal with big debt can literally tear families apart.
Take stock of your finances
Step one on the road back to financial solvency is to take stock of where you stand. This is an area where a spreadsheet program can help. The first column should be your income. This would include your salary (or salaries), any retirement savings, year-end bonuses, interest from investments and any other form of dependable revenue. Your next column should be your debts, followed by the interest you pay on each, the minimum monthly payment required and the day of the month when a payment is due.
It won’t be a pretty picture
When you see your earnings versus your debts, you may be shocked. But at least you know why you’re having a big problem with debt and can start doing something about it. That something is called creating a budget that can help you reduce your spending so you will have extra money you can use to pay down your debt.
Where are you overspending?
Do you have any idea as to how much you spent on groceries last month? How about clothes, entertainment or transportation? You can’t know why you got into trouble with debt until you know how you did it. You’re clearly overspending in some category but which one? You must track your expenses for probably a month and then divide them into the appropriate categories – clothing, food, entertainment, insurance, gifts, transportation, healthcare, household expenses, miscellaneous (those extra large coffees on the way to work) and the like. This should give you a clear picture of where you could make cuts. Most people find that the easiest categories to reduce spending are food, entertainment and miscellaneous.
How much to cut your spending?
How much should you reduce your spending per month? I can’t give you a number as this will depend entirely on your age, your income and your lifestyle. However, a good goal would be to cut it by at least $200 a month, which you could then use to start paying down your debt. Of course, the more the merrier – or the more money you can save, the faster you will get out of debt.
Create goals
Most financial experts say that the secret to sticking to a budget is to have both short- and long-term goals. Getting out of debt is a good short-term goal. Your long-term goal might be to buy a house, educate your children or take a trip around the world. You should be able to see that you’re making progress towards realizing both type goals. This can help you stay motivated. Take the example of getting out of debt. It’s much easier to stay motivated if you can see your debt going down every month and that you’re getting closer and closer to becoming debt-free.
Settle your debts
One excellent way to take the sting out of that 4-letter word debt, is through debt settlement. This is where you contact your creditors and offer to settle your debts in a lump sum and for much less than you actually owe. If you want to do this, you will need to stop making even the minimum monthly payments on your debts for at least six months before you contact your lenders. This is because they are generally not motivated to settle until you have missed that many payments and seem to be on the verge of declaring bankruptcy. You will need to have the cash on hand to pay off any debts you settle and great negotiating skills. However, debt settlement is the only way you can get your debt reduced and it’s why so many American families have chosen it to achieve debt relief.
National Debt Relief helps people nationwide resolve $10k or more in unsecured debt. Our debt coaches negotiate with creditors on your behalf so that you pay a fraction of what you owe and can become debt free in as little as 24-48 months. 
