Is Borrowing Money The Only Option To Pay Off My Debts?
Being stuck in debt can be a really stressful and difficult situation especially when you need to handle a number of different creditors
. Some people are fortunate to have their family members or friends help out by lending them the money they need to pay off their debts. But in reality, you can't always expect to have a friend or a family member come to your rescue during these times of need.
What can you do when faced with a serious debt situation? Below are some helpful tips that can help you:
1. Set a definite monthly budget. How much do you spend on your bills and expenses each month? Do you have a clear idea on how much money goes to your necessities and how much goes to luxury expenses? Compare your expenses to your monthly income. Maybe it is time to make some adjustments in the way you budget your money or change your spending habits to accommodate more important bills like your debts. The important thing is for you to distribute your earnings each month between your necessities, personal expenses, and in paying your debts.
2. Examine your credit card debt closely. If your debts primarily consist of unpaid credit card balances, study which of your credit cards has the highest rate of interest and prioritize paying off these credit cards first. This will enable you to save significantly on high interest fees so you can use the money on paying other bills instead.
3. Use cash instead of card. Frequent use of credit cards can easily lead to uncontrolled debt. While you're striving to pay off your existing credit card balances, make sure that you're not continuously incurring new charges. Some people literally put their credit cards in a freezer to keep from using them on their shopping. If such a practice helps you put your credit card use in control, then by all means, practice it.
4. Cut out unnecessary expenses. You may need to exercise a big amount of self-discipline and determination to cut back on some of your personal luxuries like spending on long distance calls or dining out every day but it is all worth the effort.
5. Be cautious about consolidation loan options. People who are stuck in debt problems are easy targets of predatory lending companies. You may be offered to take out a debt consolidation loan but with very expensive interest rates that in the long run, will bring your far worse debt problems. If you are planning on getting a debt consolidation loan, carefully consider your options and keep in mind to always analyze and understand all your lender's terms and conditions.
6. Arrange a repayment plan with your creditors. Most lenders are willing to extend help as long as you talk to them and make them understand you current financial situation. When they see your willingness to take responsibility over your debts, they will surely try to work out a solution to make your repayment less of a burden to you.
7. Look for other possible income sources. If your current salary isn't enough to cover all your debts and expenses, it is best to find other sources of income. Yo might need to get a part time a job, start a small business or use you skills to earn extra income.
Copyright (c) 2010 Liz Roberts
by: Liz Roberts
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