Impulsive buying behaviors have entangled many of us into a debt crisis.
We are continuously making purchases on credit until our liabilities strike us like lightening and then you can imagine the effects of the thunderbolt.
Today, one of the major reasons behind the credit crunch is our debts which are piling up to the height of Mt.
Everest.
Once you have the credit card in your hand, ideally you are mentally prepared to make a monthly installment.
But then if this really is the case then why are so many of us in debt? The simple reason is that we get so carried away with our purchases and forget how to handle our finances.
Here are ten steps to get out of debt.
1.
The first and foremost fact that I have personally practiced is managing my budget.
Undoubtedly each of us is surrounded by several temptations, but maintaining a budget each month helps control the excessive or perhaps even the unnecessary spending.
Remember your budget should be realistic, outlining both your short term as well as long term goals.
2.
You may want to reserve or set aside a certain amount of money as insurance against future debt.
This insurance covers emergency expenditures such as illness or repair and maintenance etc.
however, you should not have immediate access to this money so that it attracts you at once and you go and spend it.
3.
Minimize your spending.
The economy is indeed in recession and will take time to recover.
It is important to cut down your spending, do this by noting down your weekly purchases and then start deleting the inessentials.
4.
Sometime or the other, the need for a credit card does arise.
Thus it for you to decide as to when to use your card.
Try to minimize your expenses and remember as the amount of credit increases, the greater the amount to pay back thus increasing your debt.
5.
Start living within your own means.
Always make sure you have the required amount in your hands to meet your expenses.
Do not go overboard.
6.
There are times when you may find yourself in severe debt so a wise decision you could take is to negotiate with the credit card company.
This benefits both the company as well as you; your debt liability decreases whilst the company is assured of gaining something if nothing.
7.
A recent way of reducing debt was to pay off your existing debts first.
Once you clear the debts, start saving.
In this manner one can build cash reserves and in the future can meet up with debts requirement.
8.
Enlist yourself in a debt-management agency where you can receive counseling.
Sometimes when people are in great debt, they tend to lose themselves.
Counseling can prove very effective and can remove you from the mess.
9.
There are several people whom I personally know and have come across who get so carried away by sales talk.
They are so easily convinced when people try to sell their credit cards to them that they forget that they haven't yet reduced one debt and they have added yet another.
Say no to those cards, they are an added piece of trouble for you.
10.
Prioritize your debts in a manner that you pay off the debts with the highest rates of interest first and then start moving onwards.
By tackling one debt at a time, you are encouraged to further reduce your debts as you feel the burden lessen.
We are continuously making purchases on credit until our liabilities strike us like lightening and then you can imagine the effects of the thunderbolt.
Today, one of the major reasons behind the credit crunch is our debts which are piling up to the height of Mt.
Everest.
Once you have the credit card in your hand, ideally you are mentally prepared to make a monthly installment.
But then if this really is the case then why are so many of us in debt? The simple reason is that we get so carried away with our purchases and forget how to handle our finances.
Here are ten steps to get out of debt.
1.
The first and foremost fact that I have personally practiced is managing my budget.
Undoubtedly each of us is surrounded by several temptations, but maintaining a budget each month helps control the excessive or perhaps even the unnecessary spending.
Remember your budget should be realistic, outlining both your short term as well as long term goals.
2.
You may want to reserve or set aside a certain amount of money as insurance against future debt.
This insurance covers emergency expenditures such as illness or repair and maintenance etc.
however, you should not have immediate access to this money so that it attracts you at once and you go and spend it.
3.
Minimize your spending.
The economy is indeed in recession and will take time to recover.
It is important to cut down your spending, do this by noting down your weekly purchases and then start deleting the inessentials.
4.
Sometime or the other, the need for a credit card does arise.
Thus it for you to decide as to when to use your card.
Try to minimize your expenses and remember as the amount of credit increases, the greater the amount to pay back thus increasing your debt.
5.
Start living within your own means.
Always make sure you have the required amount in your hands to meet your expenses.
Do not go overboard.
6.
There are times when you may find yourself in severe debt so a wise decision you could take is to negotiate with the credit card company.
This benefits both the company as well as you; your debt liability decreases whilst the company is assured of gaining something if nothing.
7.
A recent way of reducing debt was to pay off your existing debts first.
Once you clear the debts, start saving.
In this manner one can build cash reserves and in the future can meet up with debts requirement.
8.
Enlist yourself in a debt-management agency where you can receive counseling.
Sometimes when people are in great debt, they tend to lose themselves.
Counseling can prove very effective and can remove you from the mess.
9.
There are several people whom I personally know and have come across who get so carried away by sales talk.
They are so easily convinced when people try to sell their credit cards to them that they forget that they haven't yet reduced one debt and they have added yet another.
Say no to those cards, they are an added piece of trouble for you.
10.
Prioritize your debts in a manner that you pay off the debts with the highest rates of interest first and then start moving onwards.
By tackling one debt at a time, you are encouraged to further reduce your debts as you feel the burden lessen.
SHARE
