Whether anyone cares to admit it or not, the fact is that most people like to live in style with every modern convenience at their fingertips available to them right now, in the present.
This outlook results in people leaving the “paying for it” part till tomorrow. The problem with this line of thinking is that “tomorrow” often turns out to mean 10, 20, 30 or more years from now.
This method is commonly referred to as, “paying on time,” which is ironic, since it means just the opposite—not paying anything on time!
While this might seem all well and good as far as lifestyle in the here and now goes, there is a high price to pay in the long run, and that high price is called debt.
Factor in a hefty interest, and if left unchecked for long enough, the original debt will seem like nothing!
Recent statistics show that credit card debt is getting higher, with many people owing tens of thousands of dollars to credit card companies, often thousands above the original amount owed!
Although being in deep debt is depressing at best, there is good news! It is not as difficult to get out of credit card debt as one might think. Here are some steps to take to get you on the debt-free road!
1.) Make the decision
The first step is to decide that you want it and that you are willing to learn to live within your means, cut back when necessary, and make it a habit.
Good financial habits will keep you safe from present and future credit card debts and will give you a feeling of satisfaction and control.
Even if you do get out of debt, you need to stay out of debt, and this is where building good spending and saving habits is imperative.
2.) Take stock of your finances
Do you know how much you owe? What monthly payments are you making, and how much longer do you need to make these payments?
These are just a few of the questions you need to get sorted out at the beginning of your path to a debt-free life. If this process seems complicated and confusing, never fear!
There are numerous online tools to help get this figured out and organized for you in no time.
3.) Make goals and write them down
Probably the easiest way to make and enact a plan is by making a list. Make a list that is clear, easy to follow, realistic yet challenging enough that it would make a noticeable difference soon. Here are a few ideas to get you started:
a) List your credit cards and their corresponding debts
b) Note how much you would need to put aside monthly to start paying them off
c) If you owe money on more than one card, pay off the one with the highest rate balance first
4.) Make the cut
Once you’ve taken a good hard look at everything, ask yourself if there is anything you can get rid of or do without, then trim the fat.
Are you making too many monthly payments on goods that you don’t really need and therefore not able to keep up with your credit card payments?
Pay off your credit card debt first, and then you can see what else you can add further on down the line.
5.) Create an “emergency” fund
Living beyond one’s actual income through the convenience of credit cards is probably the number one reason people go into debt.
However, there are those who do try to live more carefully yet still go into debt due to unexpected or larger expenses such as medical bills, a wedding, a family emergency, etc.
For this reason, you might consider creating a fund that you build on monthly so that when these situations arise, you are prepared for them and they don’t cause you to go under. Using an untouchable savings account helps greatly.
Just remember, no matter how bad your debt is or how much interest you’ve racked up, you can and should live debt free! Start with these few steps and see what works for you, then keep it up.