It is actually quite straight forward to get out of debt. There are two things that you should improve if you want to achieve this goal. Earn more money and spend less of it. Better still, combine the two - earn more and spend less of it. This will help you reduce your debt even quicker.
You’re probably thinking, great tell me something I didn’t already know. The problem with these simple strategies is that people don’t have the discipline to stick with the strategy for the long term.
In fact, the majority of people with debt problems haven’t suddenly landed in a huge pile of debt but more than likely worked at it. It may have taken years before they finally realized that their spending habits were out of control. All of a sudden they will see the debt for what it is and want to get out of debt fast.
So the question is, if it took years to get the debt problem why should people expect the solution to take minutes. Getting out of debt is just like getting into debt. It could take months or years to achieve. The important thing is to implement a strategy and stick with it. Chip away at the debt mountain that you have created and it will eventually crumble.
And this is a good analogy for your current predicament. Persevere, even if the debt is large and there is no end in sight, and you will find that momentum will build. With increased momentum the debt will crumble. In practical terms, when you are paying off a portion of the capital that you owe along with the monthly interest chargers the debt will reduce quicker than ever before.
So, how do you make more money ? That’s a good question that millions of people ponder everyday. You could get a second job. If you already work a lot of hours per week this may not be a good idea. It’s your call. don’t work to hard that your health is at risk. That would be counter productive.
If you can make money from something you enjoy, like a hobby, then this is probably manageable as a second job. However, working a normal job and then working in a bar is probably not a good idea of a second job (unless making cocktails is a hobby).
Or you might consider having a home clear out and selling all the stuff you no longer need. Have a garage sale or stick the items on Ebay. You might not make a fortune but it can certainly help towards your debt problem.
Having said this, finding good ideas to make more money is probably far more difficult than finding ways to spend less of the money you already make.
Many people in debt don’t have a budget. They have no idea how much they have to spend each month and no idea what they spend their money or credit on. This is the first step to reducing your spending and getting out of debt.
Establishing how much you have to spend each month should be easy. It’s your monthly paycheck plus any other sidelines that you have going. Remember to allow for tax if your employer is not already taking this out or you may get another unwanted debt at the end of the financial year.
Now work out how much you spend. Be thorough. Include the cost of that coffee you get each morning. Your aim is to classify things that are essential and things that are not essential. Essential items, like rent and grocery bills, need to be found each month. Non essential items are negotiable.
With this said, could you live in cheaper accommodation ? Or do you not use the space you currently have well? If you own the accommodation, could you take on a lodger ? In terms of food costs, do you waste any of the food you buy each month. Maybe you could cut down on the food you are wasting.
Non essential items are things like entertainment. There are all sorts of things that can fit into this category that you can think about cutting down on. For instance, one vacation a year rather than two or three. You certainly need rest and relaxation from time to time but are you over doing it.