If you are facing mounting financial debts, you know that it may seem impossible to overcome. But we can help. Follow the steps below, part of the Oprah Debt Diet—a step-by-step guide to changing your habits and getting out of debt—brought to you by your friends at North Country Savings Bank.
Step # 1: Determine Exactly How Much Debt You Have.
Collect all of your current and overdue bills or request a copy of your credit report and figure out exactly how much you owe.
Step #2 : Eliminate Unnecessary Expenses.
Do you grab a soda or coffee while at work? They add up quickly. Track all of your purchases for one week and determine which items you can live without.
Step #3: Learn About the Credit Cards You Have.
Don't fall victim to late fees, annual fees and high interest rates—know how a credit card works. And keep in mind that minimum payments may sound great, but in reality they just keep you in debt longer.
Step #4: Learn to Cut Back on Your Spending Habits.
If you are unable to control your spending habits do not carry credit or debit cards. If you use a credit card, make the payments on time and pay as much of it as you can.
Step # 5: Develop a Monthly Spending Plan
Give yourself a budget and stick to it. It should include all housing costs and expenses, transportation and other miscellaneous expenses, and the debt that you owe.
Step #6: Develop Ways to Increase Your Income
Consider finding a second job or try altering your lifestyle. Go without a vehicle if possible and relocate if your current home expenses are too high.
Step #7: Develop a Customized Plan to Get Rid of Your Debt
Determine which debt you need to pay off first and prioritize. The date of the debt, how much it is, and what can happen if you don't pay it back should all be considered.
Step #8: Determine Why You Spend Money - and Try to Change It
Sometimes this process may require professional help, but other times it can simply be cured with other activities.
To conclude, getting out of debt is difficult - and it takes time. But once you make these steps part of your daily routine, you will be on your way to being debt free.