Debt is a serious issue that plagues most Americans, whether that debt is small, like a small car payment, or large, like student loan debt and thousands of dollars of credit card debt. A lot of people are in denial about their debt; they assume it will go away, that somehow they’ll be able to make their payments or that maybe they’ll come by a lot of cash and be able to pay everything off at once. This is a dangerous way to think. “Eventually” is a horrible time to pay off your debts.
Recognizing the problem
In order to be motivated to get out of debt, usually you need some sort of wake-up call. Something that lets you know that the debt is a problem and that you need to get out of it. This is a huge step in getting out of debt. If you never realize the problem, you’ll never be able to eradicate the problem. Don’t let yourself stay in debt denial.
Set up payment plans
If you have large bills with threats to be sent to collections, don’t let them! Contact your creditors and ask to be put on a payment plan. Most companies are willing to do this, as they would rather get paid in small amounts rather than not get paid at all. Trying to wait until you have enough money to pay off an entire bill is nearly impossible, and your bill will just get pushed off longer and longer. Setting up a reasonable payment plan will get you on track to getting out of debt.
Set up a budget
You’ll want to get out of debt as quickly as possible. Take the time to sit down and set up a specific budget; chances are that there are multiple places in your budget where you’re spending money where it’s not necessary. Anything that’s not necessary, cut out of your budget until the debt is paid off, and use that extra money to settle your debts.
Stop using your credit cards
This is especially important if your major debt is with your credit cards. Don’t make the problem worse. Hide your credit cards, and don’t keep them in your wallet. If the card is not in your wallet, you can’t use it to spend money that you don’t have. Don’t touch them again until your balance is at $0. However, don’t cancel your credit cards completely, as this hurts your credit score. Simply leave them at a zero balance.