How To Budget Out of DebtSep 26 2011
Once you’re in debt, it can feel like you can never get out. However, there is hope and it’s only five steps away!
Avoid Immediate Disasters
Bills can stack up fast, and if they’re not dealt with, you could have a big problem on your hands. Call up the companies you owe and ask for extensions on your payments, as most will allow it. Is eviction a possibility? Talk to your landlord to see if he can give you any leeway. Or get extensions on utility bills so that money can go towards rent, and pay the bills off after your next pay day.
Review Credit Card Payments and Due Dates
Paying only minimum payment on your credit cards is bad, but not paying your monthly payment at all is worse. Both of these situations can only add to your debt if not taken care of.
Gather all your bills and figure out what needs to be paid first. Then set up a payment schedule that is based off your pay days so you have sufficient funds to take care of them. If necessary, call up the companies you’re on the worst terms with and tell them you’re on a stricter budget, allowing you to start paying what you owe. They will help you slowly become on a positive status with them.
Eliminate Unnecessary Expenses
This is probably the easiest way to give yourself a little more padding in your wallet. Rethink those daily coffees, frequent rented movies or even spoiled groceries you throw out every week. Maybe switch car insurances to a cheaper one. These expenses add up, but when taken out, are rarely missed.
Journal New Budget for One Month
Once you’ve done the above steps, start journaling every cent you spend for a month. Whether on a notebook or smart phone, the more you keep track, the better view you’ll have of your spending. After one month, adjust your budget if there are still issues and you’re coming up short.
In short, the best way to get out of debt is to prioritize and put yourself on a strict budget.