5 Best Tips To Help With Debt

How much stress would be reduced from your life if you didn’t have any debt? Even though the move towards financial fitness is never easy, it’s definitely a journey worth making. If your financial house could use a makeover, here are a few tips that may help:

Start By Updating Your Budget
Are you spending more than you earn? Do you have a budget in place? When you formulate your budget, you can see where you need to reduce expenses. You may also find some expenses that could be eliminated altogether. Analyze your spending pattern so you can make informed choices on how to allocate your money. Obviously you will need to pay for housing, transportation, food, and insurance
but you may decide that cutting back on a few wants can help you achieve your financial goals more quickly.

Put Away The Credit Card
Even though it may be hard to resist the temptation of using your credit card when making a purchase, if you want to get your finances in order you will need to stop using debt. Switching to a cash only basis means you won’t have credit cards bills to deal with next month. You must only spend money that you already have – not money you plan to have in the future.

Ax The Debt
Once you can get yourself to stop accumulating more debt, you need to make a plan to get rid of the debt you already have. Gather all your debts together and make a grand total. Then, plan how you will pay them off. You may choose to start with the highest interest rate debt first. Slash your spending to put as much money as is feasible towards your debt payments. To come up with additional income consider working overtime, taking a second job, having a garage sale, or selling items on eBay or through Amazon.

Establish an Emergency Fund
An emergency fund can help to keep you from incurring additional debt. Once you’ve paid off some of your current debts, try setting aside some extra money for emergency expenses like car repairs, medical bills, etc. This will help to eliminate you having to use debt (i.e. your credit card) to pay for these types of expenses. Having a financial cushion to lean on goes a long way in reducing financial related worries.

Disclosure: This blog accepts forms of cash advertising, sponsorship, paid insertions or other forms of compensation. Unless otherwise expressly stated, you should assume that NotMadeofMoney.com has an affiliate relationship or other material connection to the providers of goods and services mentioned by, recommended, hyperlinked to, or otherwise referenced on NotMadeofMoney.com. Please see the full disclosure statement.

3 comments

  1. Elizabeth @ Simple Finance says:

    This is exactly the advice I gave to a friend who is battling some pretty severe credit card debt. She told me she was still funding her 401(k) (no company match!) and her emergency fund, but not tackling the debt. I told her the debt had to be her priority for now, not the investments.

  2. Money Beagle says:

    I only count four here but they are good plans nonetheless :)

  3. Melissa@LittleHouseintheValley says:

    Good advice, but I would actually advocate setting up the emergency fund first. We tried to hit our debt first and made good progress, but then we had several emergencies, no emergency fund, and we had to go a bit more in debt. When the financial dust settles, we are going to start again by funding our emergency fund first, before we start attacking debt again.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>