How To Get Yourself Out Of The Pit Of Debt
The pit of debt is not a pleasant place to be. It’s a dark, scary and very lonely place. In the pit of debt, you have no more control over your money. Every bill that comes through your door will threaten to overwhelm you. You will feel as if there is no way out. Darkness surrounds you…but wait! There is light. There is hope. You don’t need to feel trapped forever. Here are the steps you need to take to get yourself out of the pit you may have found yourself in.
Step 1: Take stock of your financial situation
It’s time to get everything together – your bank, loan, credit card, and store card statements – and work out what you are paying each month. Contact each company and explain your situation. To help you start your climb out of debt, the companies involved may be able to offer you a payment plan to make your life easier, in the short term at least.
Step 2: Start to manage your money
Prioritise your life, so you are only spending money on the necessities. These should include your utility bills and food. Anything else – subscriptions, takeaways, other luxury expenses – should be put on hold. Go through each of your important expenses, and look for ways to make savings. You will be able to switch to a cheaper utility provider, for example, and you may not need comprehensive coverage on all of your insurances.
Step 3: Tackle the biggest debts
Look for the debt that has the biggest interest rate. This is what is costing you the most money each month. Focus on getting this paid off first, and you will have more money to pay off the rest quicker. Ensure you meet the minimum payments each month too, as paying less, or missing the date, may incur a higher rate of interest. You should also shop around other credit card or loan providers. If you can find a better rate of interest (or preferably zero interest rate), make the switch over as you will save yourself a lot of money in the process. Consider this for all your loans and credit card – consolidating them into one easier to pay amount with the cheapest provider.
Step 4: Don’t add to your debt
You need to live within your means. So, after you have consolidated your debts, don’t be tempted to take out another credit card, loan, or store card. Don’t be tempted to use any free money you may have acquired in your bank account. Cut up those harmful pieces of plastic. Curb the temptation to spend money on anything you don’t need. And look for ways to save money around your home, as this will keep down your regular expenses.
Step 5: Get back on track
Once you find yourself in a better position, it’s time to rebuild your life. Think about your credit score, and follow this link on how to restore credit. Keep a record of your spending, and start putting money away each month to help you should an emergency arise. Seek help if you need advice on managing your finances, and adhere to good spending habits. You don’t want to get back into debt, so change your life to better your future.
Don’t struggle alone. If you are dealing with debt, talk to the people around you and explain your situation. A listening ear and a shoulder of support are always useful. And then seek further help by speaking to a debt-relief charity who will give you more detailed advice than we have managed to offer you here. You don’t need to stay in the debt pit forever, as there is light and hope at the end of the dark place you have found yourself in.