Debt is a horrible thing. It keeps many of us awake at night. When much of your income is being used to pay off debt, it is hard to do the things you want in life.
Fortunately, it is possible to tackle your debt and get things back under control. Regardless, of your personal circumstances, with the right help and advice you can start to reduce what you owe. Eventually, most people are able to clear their debt completely. Here are the basic steps you will have to take to be able to do that.
Work out your budget
First, you need to sit down and work out where your money is going. To do that, try this budget calculator, first. It is easy to use and comprehensive.
Use a budgeting app
You also need to get into the habit of tracking what you spend. The easiest way to do this is to download a budgeting app. Once you have connected it to your bank account and credit card, every time you buy something you will be prompted to account for where that money went.
Cut out unnecessary spending
When you know how much you have coming in and out you will be in a position to rebalance things. Start by identifying where you are wasting money.
For example, if everyone is buying their lunch while they are out, consider switching to making packed lunches. If you have subscriptions for things you rarely use or do not really need, cancel them.
You will be stunned by just how much you can save by doing this. But, make sure you do not get carried away and start spending that cash on other non-essentials. The idea is that you channel the cash you save into paying down your debt. Later, when you are debt clear, is the time to consider treating everyone.
Save on what you buy
As well as cutting out spending you should also get into the habit of shopping around for those items and services you cannot live without. For example, getting and comparing quotes when it is time to renew your insurances and switching power supplier when it saves you money.
Start using discount codes and coupons, whenever you shop. You will be stunned by just how much money you will save by doing this. Just be careful not to buy items you do not really need. When you get sent a 50% off coupon there is always a temptation to use it.
Investigate restructuring your debt
In many cases, it is well worth exploring the possibility of restructuring your debt. If you do it right, you will end up reducing the total amount of interest you pay. This should result in your becoming debt-free sooner.
But, you need to be super careful when doing this. It is all too easy to inadvertently end up taking out a debt consolidation loan that actually leaves you paying out more interest overall. So, before looking at restructuring your debt, read up about it and seek independent financial advice.
**This is a collaborative post**