Many folks live above their means. Whether it’s because they don’t stick to a proper budget or just don’t seem to care, many Americans suffer from debt, especially credit card debt.
If you think you’re alone in your financial troubles, you’re mistaken. An estimated 80 percent of Americans are in debt. That includes debt from mortgages, student loans, and, you guessed it, credit cards.
Here are four important tips to get out of credit card debt and put yourself in a solid financial position.
Before you can start reducing your debt, you first need to know exactly where you stand. Write down the amount of debt and interest rates on every card that you have, starting with the smallest balance on top of the list and the largest one at the bottom. Then total up the numbers. This will help give you an understanding of exactly how much you need to pay off.
Stop Using Your Cards and Formulate a Budget
It’s critical that you stop using your cards all together. If you don’t have cash for an item, then don’t purchase it. You will never get out of debt unless you stop using your cards as soon as possible.
After you wean yourself from using your credit cards, it’s time to formulate a budget. Be honest with yourself when you are doing this and include everything that you owe for the month, including rent or mortgage, car payments, utility bills, and other bills. Also make a list of other monthly necessities, including groceries, and factor that into your budget. And be sure to stick to it! Check in with yourself every week to see if you are actually staying on track.
Get a Loan
If you find that you simply cannot stick to your budget to save up money to pay off your debt, then it’s time to consider getting a loan. Decide what type of loan works best for your personal situation. Some types of loans to choose from include a debt consolidation loan and home equity loan.
Contact a local qualified loan representative to see how much of a loan you qualify for. You can also find an investor or borrow money from a close friend or family member. Strike up a contract with them so they know when to expect you to pay them back.
Secondary Source of Income
It may seem tough, but taking on a second part time job can give you the economic boost that you need to get out of debt.
Getting out of credit card debt can seem like it will take forever. But in actuality, if you formulate a plan of action and stick to it, you can dig yourself out of debt and into a better economic situation, and a better life.