As a recent college graduate, I can certainly relate to debt. Debt creates more debt, and a vicious cycle can continue for years. Extreme cases will even lead to bankruptcy or foreclosure on assets, or lead to depression, bad diet, overworking, and separation from family. Finally, today can be the day to take a step in the right direction. Here are a few things you can do to dig yourself out of the hole of debt.
Make A List
Debt sneaks up on us. Nobody makes a detailed plan of how to get themselves in debt. Instead, we lose track of exactly how much we owe. Students loans lead to charging on credit cards. High interest forces us to transfer the balance to another card, with a higher limit. Charging on that card leads to getting another card; this can be avoided with a detailed budget. Budget for necessities and try to make a list of potential unforeseen expenses. New tires, school books, and unexpected doctor visits can throw a monkey wrench in any budget. Find a way to make a detailed list of expenses and how you are paying for them.
Sleep On It
Impulse purchases are like drunken text messages or unwanted tattoos. They remind us of our financial mistakes from the past. Maybe it’s a stereo system that is collecting dust in the basement. Maybe it’s a new coffee maker that you don’t wake up early enough to use. Most impulse buys are regretted immediately. Anything important enough to buy tonight will remain the same for tomorrow. Unless it’s an emergency need, always sleep on your purchases. You will thank your past self in no time.
Student Loan Forgiveness
If you are reading this mainly because of student loan debt, you may be entitled to some relief. This sounds like one of those too good to be true commercials, but it does exist. Various employers will match your payments on student loans. Sometimes, payments will decrease due to your wages. Companies will hire for services in exchange for helping with your debt. You aren’t always trapped in an impossible payment situation. Look into every possible avenue for relief.
Rewards & Benefits
I’m not going to tell anyone to spend money on a credit card to get rewards. However, if you are already reading this article, you may have already racked up some debt this way. Often, credit card companies will give you various rewards for using their services. Always check to see if you have anything free or discounted earned from your card spending. Free airline miles, gift cards for meals, and hotel stays can save money that can be used to build a savings or put bigger payments on loans.
These steps aren’t a quick fix to being able to spend any way you want. Instead, they are a process that can require years of diligence depending on your level of debt. This isn’t to discourage you; it’s to encourage you that with persistence you can overcome any debt obstacle that is in front of you.
What are some ways you’ve started tackling your debt?