Most people have, at some point in their lives, overtaxed their budgets a bit. And some people have gotten in over their heads, and can’t figure out how they’ll pay their bills. If you’re in over your head, don’t fret – you can work your way out of debt. But you have to learn to live on what you bring home.
You can’t blame others and you can’t make excuses. You’ve just got to “man up” and put your nose to the grind stone and work at alleviating your debt.
But how do you get started? First of all, you have to set up a budget. Some might look at this as a chore, but it’s really the best place to start. A budget will help you know exactly how much money you have and how much you’re spending, as well as where your money goes. But remember: when setting up your budget, be honest. Don’t lie to yourself about how much you actually bring home or how much you spend. And be honest about your spending habits – if you have guilty pleasures that you consider to be insignificant expenses, don’t forget that they add up, too. Admit to them and add them into your budget.
When looking at paying your bills, find ways to pay more than just the minimum on your credit cards. This will help you pay them off more quickly, and you’ll pay less in interest in the long run.
As you are working on your budget, try to find a way to factor in saving some toward an emergency fund. This should contain enough money to cover about three months’ worth of expenses. If you don’t have an emergency fund, and something happens like you lose your job, you could find yourself in an even deeper and more troubling financial crisis.
Don’t forget to factor in any extra cash you get, like bonuses at work, overtime or monetary gifts. This should be applied directly to your debt.
Learn to factor out those things that you don’t really need. You could probably live without cable and eat at home more, and save the difference, or use it to chip away at your debt. You may be able to even get rid of home Internet, and use the Internet connection at the local library, just until you pay off your debt, or at least pay it down some.
You may be tempted to dip into your 401(k) in order to pay off debt. But you will most definitely regret this later. You could dip into your savings, however, and replace the money once your debt is paid off.
However you choose to do it, just do it. Man up, and pay off that debt.
Guest post provided by Angye. She writes on financial topics such as unsecured personal loans and business loans. When she is not writing about finance she enjoys soccer and supporting the ASG Florida club.