Have you been struggling to pay your bills? Although it may feel overwhelming to pay off past expenses, it is possible to turn your finances around and become debt free. It takes patience and discipline. The first step is to establish an accurate, workable budget.
How to Get Out of Debt Permanently
Create Your Budget
If you don't currently have a budget for your monthly expenses, create one now. If you have a budget and find yourself continually overspending every month, then you need to adjust your budget to account for unplanned expenditures. Instead of relying on credit cards to bail you out when a sudden expense comes up, have a certain amount built into your budget for any possible incidentals. After tracking your expenses faithfully, you may find certain areas where you're repeatedly spending more than you have been budgeting. This is where accuracy and discipline are important. Ask yourself whether the overspending is due to a lack of discipline; or is it due to not planning accurately. Your answer to these two questions determines how to proceed.
Get Out of Debt
If you are in serious debt, my first recommendation is to stop using credit cards and pay for everything with cash, check or debit card. I pay with cash as often as possible, as I feel much more attached to cash and think harder about parting with it. My second suggestion is to build a small savings fund to assist with unplanned expenses going forward. Don't apply for any new cards and focus strongly on paying off the ones you have. Keep one credit card at home to avoid the temptation of unnecessary charging.
What Do You Owe?
In talking with people over the years, I have discovered various strategies toward attacking debt. The most common is to focus on the one with the smallest balance and go from there. This plan gives you quicker satisfaction and motivates you toward attacking your next debt. The momentum continues from there: assess, budget and reassess on a monthly basis.