by Charlotte Wood
(last updated February 21, 2009)
Debt is a slippery slope that's easy to fall down and hard to climb back up. Many times it's easy to not even realize that you're on that path in the first place. As soon as you realize you're in debt however you need to have a plan for getting yourself back out. There are many simple ways to extricate yourself from debt but it does take a significant amount of fiscal and personal discipline; it's not necessarily easy but it will most definitely be worth it.
The first step when fixing your money problems is to make a budget. Cut down on your spending habits and eliminate whatever you don't need; that money needs to go toward digging you out. It's one thing to set a budget and it's completely another to stick with it. Hold yourself responsible and don't allow yourself to stray outside your limits. To keep yourself motivated you could even have a chart that visually shows what you've paid back. The more you actually see you've paid back, the more motivated you'll be to keep paying off your debts.
Once your major and most urgent debts are under control, start eliminating that credit card debt. Credit card debt is most heavy (although not necessarily urgent, which makes it so burdensome at times) and is hugely detrimental to your credit score. Credit is also scary because it's so easy to become addicted to it. It can so easily seem like free money and it's not hard to forget that you do have to pay it back and then some. If you still need a credit card to stay afloat, opt for the most basic you can and only use it if you have to. Don't use it to justify that cute skirt from Ann Taylor or that new computer gadget from Apple. Getting out of debt relies primarily on disciplining yourself.
Take a good look at your housing circumstances. Can you afford to downsize for a bit? Sometimes getting that mortgage off your back and even opting for renting for a while can make big steps in your financial recovery. Another good, small thing to keep in mind is to have your check directly deposited. When it's automatically in your account, it's less tempting to get cash out for those extra, unnecessary expenses. Take initiative and work out payment plans with your creditors. Don't allow the harassing phone calls to continue and just work out a way for you to pay the money you owe. Creditors will probably be easier to work with if you show responsibility for your debt.
Paying back debt can take a long time and a lot of discipline, but the reward is by all means worth it. A life without debt is a life where you really can do what you want and you don't have to feel constricted by the balance in your bank account. Take control of your money and learn to live a fiscally responsible life.
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