Debt can be soul destroying. You can come to dread the sound of the phone ringing or the doorbell going for fear it being a debt collector. We can get into debt for many reasons. Sometimes we have to make a big purchase. Other times, we live a lifestyle that is simply outside of our means. It is incredibly easy to lose sight of how much you are spending, even if you have prepared a budget. We give you five top tips to get out of debt and stay out of it too.
This may sound harsh, but you may have to rein in your spending for a few months to stop the debt getting bigger. This gives you an opportunity to catch up with some repayments. Yes, you will have to go without for a prolonged period but living frugally can still be fun. Most of us remember grandparents or great grandparents who really didn’t have a lot, and yet they were the happiest people we knew. If you can sell anything that is surplus to your needs, you may be able to raise enough cash to pay off a whole month’s repayments.
Get another job
Another source of income could be essential to clear off your debts and get you back in the black. You can work from home for a couple of hours in the evening without it disrupting your life too much or get a Saturday job. Search online or look at ideas like those from Income Store’s alternative investment concept to find additional income sources. Every little helps, and just a couple of extra hours employment could cover your credit card interest for the month. If you teach or have some skills you could pass on to others, this can also be a useful source of income. This can be done in your own time on your own terms too.
Make a very strict budget and stick to it
Remember to keep the essentials on there. Food, rent, utilities, taxes, fuel and car payments cannot be dropped. Clothes shopping and visits to the salon can be sacrificed, and you can even put gym and cell phone contracts on hold for a few months too. Cut out takeaways, holidays, sweets, booze and other things that are not essential. When the debt is managed, you can slowly reinstate things again. Try withdrawing the cash each month. Once it is gone, it is gone, and you haven’t overspent. Prepay credit cards can work the same way if you are worried about security.
Keep a close eye on where your money goes
If you haven’t done so already, take an hour or two to analyse deeply what you are spending your money on. A credit card or bank card statement will be quite revealing. Total up all the things you bought that were not essential to you. That is the sum you can be saving every month if you strip your life bare of non-essentials.