Falling into a debt trap is simple. Spending more than earning. Then borrow more, to satisfy the present debt, and then borrow again to pay for the next debt and so on and so forth. To climb out of the debt trap is difficult, but possible. Credit cards are the most common culprit in leading a person to debt. Getting out of debt fast is essential, as more the debt stays, the more interest it accumulates. And, you may even face a scenario where you have to spend years, working to pay the loan that you spent in a couple of days, buying the house and car. So, if you are faced with a pile of bills, then it is time to sit down and straighten your transactions. Getting rid of debt is not an overnight process, but a careful perusal of the tips given below will rid you of debt as fast as possible.
Getting Rid Of Debt
- Note down the debts you owe and the interest charged and pay off the immediate ones. Create a debt fund and keep increasing it.
- As long as you have the credit cards, there are chances of again getting into debt. Pay all the outstanding credit card dues, at once even if you have to take a loan. Credit card interests are high, so paying immediately will save you the extra interest.
- Get rid of the credit card. Apply for one, if you want to, once you have made a considerable saving. Take credit cards that offer low interest rates.
- Keep a dairy, where you can note down your spending every day; and try to keep minimizing the spending amount. Categorize each segment of your spending, to get an idea of where the extra money goes, and then put your plug there.
- The sooner you pay the bills, the better it is, as down the month; even if money is sparse, the essentials are provided for. When you pay the bills early, it helps to regulate the monthly spending, according to it. Like if the bills are higher, slow down on the spending.
- Don’t keep adding onto your existing debt, by borrowing more. A debt is easy to clear but if you keep on adding, it will never clear.
- If the situation is desperate, then live frugally to pay off the debt. It will also teach you the value of money. Ultimately, it is better to live frugally for a few months and be relieved of the constant worry over the debt.
- Improve your current source of income, by working during the spare time. An addition to the present income will help you pay your debt faster and also won’t leave you the time to spend or even think of it.
- Use every available means to save. Like use recycled products as they are cheap. Save on electricity and water by not wasting.
- As a last option, consult an efficient debt counselor.