Getting out of debt sounds easier if you make enough money to pay your bills each month and have plenty left over for paying down account balances and loans. But if you are stretched too thin already, getting out of debt can sound like an insurmountable task and you might be tempted to ignore warning signs of financial distress. It might not be easy, but even people who make less are able to pay off debt and stay out of debt. The key is to have a good plan, and stick to that plan.
Getting out of debt when your budget is tight takes not only planning, but also a bit of sacrifice. The good news is that the sacrifice is short term, but the effects of living debt free last a lifetime. Some tips for getting out of debt when you don’t make a large salary are:
- Refinance your debt by taking out one loan to pay off all of your debts, with an overall lower interest rate and repayment term.
- Eliminate unnecessary spending and put that money towards debt, or to an account reserved for emergencies.
- Take a part time job, temporarily, to make some extra cash to pay on your obligations.
- Shop around for lower insurance rates, lower interest rates, and lower cell and utility services.
Another option is to modify your mortgage, which will give you a lower interest rate and lower house payment. The money you save can be used to pay off low balance credit cards or signature loans, and then to tackle larger debts. If your circumstances do not allow you to do any of these things, you can also talk to an attorney about filing for bankruptcy to ease your financial burden. Bankruptcy will help get your finances in order and give you a clean slate to start fresh. Eliminating debts relieves the pressure that goes along with owing more than you make, and gives you a fresh perspective on how to budget for the future. When you no longer have to worry about making ends meet you can start planning for long term financial goals and put a plan in place to reach those goals.
For help eliminating debt and information about how bankruptcy can help you get out of debt, contact us at www.DsouzaLegalGroup.com.