Debt is not a Death Sentence: Use These 4 Tried and Proven Strategies for Getting Back on Your Feet

Debt is that dreaded four-letter word that has the power to turn your life into a living nightmare. Sometimes your debt can be a consequence of overspending and lack of foresight on your part, but eventually even this will come back to haunt you and cause you countless sleepless nights. However, being in debt is not a death sentence. There are scores of people getting out of debt daily, and some in a short period of time. Follow these 4 proven strategies to get back on your feet and out of debt.

1. Work Out A Realistic Budget

Work out a budget in order to track what your income and expenses are. This will help you see what you have to work with and let you have a realistic viewpoint of the health of your finances. You will quickly know whether you have any money left over or whether you are dipping into the negative. The goal is to move away from the negative, which is your deficit, into the positive or surplus.

Make sure to pay off a lot more on your debt than what is required whenever you can. With your surplus, you can easily knock down a couple of thousands from your debt amount.

2. Reduce Your Expenses

The most obvious way for you to get out of debt is to reduce your spending. Do not succumb to unnecessary spending to try to get out of debt. This will drive you even deeper down the rabbit hole.

Do you spend $300 on weekly groceries and another $300 on eating out? Don’t do that — eat out less, and focus on buying store brands of your grocery staples. Try a more frugal way of living. What you save out of that initial $600 than can wipe out a huge chunk of your debt.

Another way to reduce your expenses is to reduce the number of things you just have lying around the house unused. Declutter your life and sell all those extra goodies just lying around gathering dust, and use that money to pay off part of your debt.

  1. Have an Emergency Funding Source
    In order to keep a level head during times of financial stress, it is wise to keep an emergency funding source ready in case things go south. Yes, this sounds counterintuitive and contrary to what you have to do to stay out of debt, but having a reliable place to go to in times of need will help you stay away from high-interest loans and more credit card debt.

    Acquiring a small personal loan to keep things afloat should not be stressful. In fact, it should be easy for you. You should apply from a place that is well known for fast approval, and where you don’t have to deal with unnecessary delays in receiving the money.

  2. Refinance Your Debt

Refinancing your debt is a method used to move your debt to a vehicle of lower interest rate. This is done by transferring your debt to a different lending company than the one currently handling it. You can also transfer credit card debt to a credit card with a lower interest rate or use a loan with a lower rate to pay off the credit card debt. The idea is to lower the overall interest rate you are paying on all your debt.

It is important to consider and especially read all the fine print associated with closing costs and interest rate rules before signing on your new loan. Do not agree on any type of refinancing until you feel adequately informed and understand what you are getting.

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