If you are like most Americans you are in debt. With the unstable economy over the past few years, what may have been manageable before has become burdensome, with many people barely surviving trying their best to live month to month. The best way to get ahead in life is to be debt free – you have more freedom to thrive during the down-times than to be merely hanging on. Depending on your situation this can be a quick and easy or it can be long and difficult, but the end result is so worth it!
Stop Spending: First and foremost, if you want to get out of credit card debt stop purchasing what you can not afford. They only way to know what you can afford is to make a budget and stay within the budget month after month. Create a spreadsheet that can easily be updated that outlines all of your current bills with fixed payments, for example, your house, your car, day care, etc. Next, add in your bills that vary, electric, water, groceries, credit cards, toiletries and entertainment. Compare your monthly expenses to your monthly income and figure out if you are spending within your budget or not. If not, by monitoring your expenses over a few months you can find areas you can cut back on so you are staying within your budget and spending your money on what matters most – paying off your debt!
Lower Your Interest Rate: Many times you can call your credit card companies and if you have been loyal (with them for awhile) and pay on time you can request that they review your account to see if they can lower your interest rate from their standard rate. It never hurts to ask. All they can say is no, and if they do – you can always transfer your balance to another card (if you already have one) and usually get a very low interest rate for a certain amount of time, typically 12 months or so. This is ideal, as more of the money you are paying each month is being applied to the principal instead of the interest.
Pay Extra: Credit cards are now required to show you how long it would take you to pay off your bill if you pay only the minimum payment. In most cases this is completely de-motivating because it equals years of paying… the credit card companies of course want you to take longer to pay off balances because that is how they make the majority of their money – off the interest they charge you. If you are serious about paying off your credit card debt then you need to pay as much extra as you can. If you are already tight on your budget figure out ways to cut back so you have more money to put toward this debt. Cut back on your electricity bill by turning off lights and lowering your thermostat a few degrees, cut back on eating out and some of the extras at the grocery store. You would be surprised at how much money you spend on things that are not necessary. If you feel you are already spending the bare minimum and still do not have extra money, consider ways to bring in extra income by taking on another job or selling stuff.
Stay Motivated: Understand that paying off debt is an ongoing process and usually requires a lifestyle change. Getting into debt has become the norm of the American society and many Americans are paying the price – literally! Stay motivated on your goal by making it a competition – how much extra can you pay on your credit card each month – how fast can you pay your bills off? Dave Ramsey, a financial advisor, has a method called the Snowball Effect, which is focusing on paying off your smallest bill first so you stay motivated and then take the money you were paying on that bill and tack it on to another bill to pay that one off more quickly.
K. Villareal writes about having a better all-around. She proofreads her work with the assistance of Grammarly grammar checker.