The average household in the United States owes more than $130,000 in debt. Those staggering statistics come from debts such as student loans, credit cards, mortgages, car bills and the like. If you are one of the struggling consumers in these statistics, you can try these five tactics to get out of debt and stay out of it for good:
1. Hit the Kill Switch
The debt kill switch is something that you need to hit the moment you discover that you are in the deep sea of debt without a life jacket. You must stop accumulating debt immediately, and you must cut out everything but the necessities. This means that you have may have to sacrifice things like:
- Credit cards
- Beauty sessions
- Cable extras
- Mobile phone luxuries
- Expensive clothing
- Frequent dining sessions
- Fitness memberships
If you want to stay out of debt, you have to make a sacrifice by cutting off the things you do not need. You have to start from scratch as if you have nothing.
2. Apply for Debt Consolidation or Debt Management Plan
You may be able to obtain a debt consolidation loan that will cover all of your open accounts. The loan will help you organize and pay all of your debt. You may not qualify if your credit score is not high enough, however. In such a case, you can apply for a debt management plan, which is an organized third-party repayment plan.
3. Pay One Thing at a Time
You may owe so many lenders that the thought of repaying all those people makes your head spin. If you think you are too deep in debt to get out, contact a bankruptcy attorney like Wiesner & Frackowiak, LC for help; however, sometimes you can solve big financial problems by focusing on one defaulted account at a time. Eventually, you will get back on your feet.
4. Use Budgeting Tools
Consider budgeting better through tools like Quickbooks, Kiplinger and Budget Pulse. They help you to see whether you can afford certain things or not. You should have one of these on your person at all times.
5. Commit to Saving
Creating an emergency savings nest is a necessity. You can start by saving $5 a week if that is all you can put away. It may not seem like much, but getting used to a little bit less spending money at a time can accustom you to being more frugal. Commit to it, and stick to whatever amount you decide on.
Following these five tips to a T can help you avoid a lot of headaches and stress. It will lighten the burden that currently rests on your mind and heart. Once you get out of the hole and take hold of your financial life once more, these strategies can keep you on the right track for good.