4 Tips To Help You Get Out of Debt

Being in debt can be stressful, and it is also a situation that can get worse extremely quickly. It can be challenging to work out how you are going to pay what you owe and the interest on top, especially if you have a financial situation that keeps changing.

 

However, it isn’t all doom and gloom. There are things that you can do to ensure that your debt reduces over time.

 

Understand how much debt you have

 

To start getting out of debt, you need to know how much debt you have. Try to make a list of all of the debts currently outstanding. Look at your bill statements to find out exactly how much you owe, and how much the interest is on each one.

 

When you can see your debts, you can plan which one you are going to work on getting rid of first. This means you could pay the minimum on all your debt and more on one, so that you can get rid of it faster. You can then keep doing this with all of your debts until they are gone.

 

Keeping a note of your income will also help you to work out how much you can afford to pay off every month. Having all of this information can help you to create a budget and debt plan that you can stick to.

 

Pay more if you can

If you have the means to pay more towards your debt bills, than you need to, do it. If you can up your monthly payment, you’ll pay off your debt more quickly, and you may end up paying less interest overall, saving you some money.

 

Before you start to increase your payments each month, make sure that there is no penalty for prepayment, and that any extra payments on your loan go to pay off the initial sum and not the interest.

 

Negotiate

There may be times when you can negotiate your interest rates and ask for them to be made lower. It may not seem like something that you can do, but people do it quite often.

 

If you are someone that pays their bills on time frequently, and they have never had any trouble with you, then there is a possibility of being given a lower interest rate.

 

You should also see if you find any deals on some of your other bills. If you manage to negotiate the price down, then you will be able to use the money you save on your bills, towards paying off your debts.

Investigate consumer proposals

 

If you have significant debts and are unsure of how you are going to pay them off, instead of filing for bankruptcy, you could look into debt proposal. Submitting a consumer proposal has its advantages as it allows you to keep your assets, unlike in bankruptcy. It will enable you to make payments that you can afford, and you could only end up having to pay around half of your debt.

 

Once you have paid off your debts, try to work on better money management practices so that you don’t end up in a bad situation again.

 

 

For live CPA exam prep and accounting classes, join Conference Room for free. Members will be notified of course dates, times, costs, and how to attend these courses.

 

Get your questions answered to pass the CPA exam, and to learn accounting concepts.

 

Go to Accounting Accidentally for 300+ blog posts and 450+ You Tube videos on accounting and finance:

 

Good luck!

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

(email) ken@stltest.net

(website and blog) https://www.accountingaccidentally.com/