Drowning In Debt? Six Tips To Gain Financial Freedom Again

Drowning In Debt? Six Tips To Gain Financial Freedom Again

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Getting into debt is easy., but getting out again is much harder. However, it can be done by planning an effective financial management strategy that will have you in the back in no time. Here are six easy tips to pay off debt and live on a regular income.

Make credit payments on time

Missing payments or paying late will only delay the repayment process. Furthermore, it will damage your credit rating. If you must miss a payment due to unforeseen circumstances, contact your creditor and explain the situation. It is likely the situation will be noted in your file without a ding to your credit score. At the very least, make the minimum payment each month. Forgetting about it or neglecting it all together will do much more harm.

Stop using credit cards

Instead of paying for everyday expenses with your credit card like gas, food, or entertainment, switch to cash payments only. Try not to use your credit cards at all, except for emergencies. Start an emergency savings fund from each paycheck so that when an unexpected bill hits, you can use the fund instead of your credit card.

Pay off the smallest balance or largest interest rate first

This strategy depends on which balance can be paid off soonest. If you have a relatively small credit card balance with a very high interest rate, apply all extra money toward paying it in full. If you have a large balance at high interest, you still may want to pay off the small balance first and then begin applying the payment no longer needed for the small account to the remaining larger account balance, so that you are paying more each month. Eliminating small balances and applying those payments to larger remaining balances will help to erase debt quickly.

Find extra funds to pay on debt

Have a garage sale or sell unneeded household items online. Downsize your car to a slightly older but reliable model to use the equity toward debt. Sell unwanted furniture or clothing at consignment shops. This can go a long way in making even small payments.

Get a second job

Write articles online in your spare time. Babysit a friend’s children for pay. Work part-time at the local supermarket or drugstore. Even a few hours weekly can contribute significantly toward paying off debt. It may be more beneficial to take on a lot of extra hours for a short time at a different job. Knowing that this is temporary can help keep you motivated and earn some extra cash.

Use the envelope method

After writing checks or using a debt card for regular bills, place cash in envelopes for things needed daily. Using cash instead of carrying a credit card will help to keep you on a budget. This will keep it easy to see when and where you are spending the money, and how quickly it can go.

Tips like these will pay off debt before you know it. It’s important to talk to financial experts when you are dealing with debt you can’t handle, say the experts at Monohan & Blankenship . There are many options to consider with debt, an getting your financial freedom back is important.

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Categories: Debt Management

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