Pull up a chair and have a seat - Welcome to the ever-growing club of consumer debt. Your biggest challenge now is to dig yourself out of this situation and avoid having to pay anyone to help you do it.
The options at this stage are usually as follow (depending on the level of credit card debt):
Consolidate into a loan.
Debt Management.
Bankruptcy.
Do Nothing...
The options at this stage are usually as follow (depending on the level of credit card debt):
Consolidate into a loan.
Debt Management.
Bankruptcy.
Do Nothing.
Pay off the cards over as long as it takes.
Make the minimum payments and keep spending.
Make an effective DIY plan.
The more popular solutions - such as consolidation loans and debt management -we see being marketed everywhere are the ones that put your money in other people's pocket. I don't know about you but for me becoming free from debt should not involve spending more money, or *borrowing your way out of debt.
So how does a DIY system work?
To break it down into five steps, it looks something like this:
1. Address your spending habits and why you are in this situation.
To ever win with money and have a healthy financial future, you have to control your money, not the other way round. Take complete control and set yourself some realistic yet desirable goals for the future.
2. Know your options, the ins, and outs of how they work and why they are not for you.
Along the way, you may be tempted by the "quick fix" "make it all better" solutions like consolidation loans and debt management. As mentioned already, there is a multibillion-dollar industry making a very healthy profit from consumer debt. Your DIY plan does not involve *paying to get out of debt*.
3. Know your situation.
Any debt relief system requires a bit of budgeting. As long you've followed the rest of the plan so far, have desirable goals and no intention of taking an easy -and expensive way out you won't have trouble budgeting.
The other thing to know is your credit score. There are an alarming amount of mistakes found on credit scores that result in people paying more interest than they should. If you are eligible for lower interest rates and 0% APR credit cards, you may qualify for a balance transfer, and if you are eligible, you might want to know about it.
4. Minimize outgoings, Maximize income, and leverage your cash flow.
If you could pay less for utilities and day to day expenses you should, there is an exciting part of saving money; you will have to be very good at cutting back if you're going to be successful at this.
Home economics, consumer education, and bargain hunting can save you incredible amounts of cash that can go toward paying off your debt quicker.
If you're serious, you can take it a step further and create a secondary source of income. Be it a second job, or using a natural skill/strength you have that can earn you money in your spare time.
With the opportunities available online, it's never been easier to find those who are seeking out some knowledge, experience and skills that you have and that they would pay you money.
5. Form your system and put it into action.
Having followed the first four steps and laid some sturdy foundations, you are now in a position to develop a quite robust snowball plan. That is a system that gains momentum as you execute it.
This step is entirely dependent on the first four steps and generating a new figure that you can assign to snowballing your credit card debt. As the debts get paid off, the figure grows and subsequently clears the rest of the financial obligations a lot quicker saving you a large amount of interest in the process.
It is possible to use a DIY plan and enjoy great success from it, yes it takes a bit of hard work and discipline on your part, but the alternatives just cost you more and keep you in debt for longer.
It's your money; it's your life, and if you want to own them both truly, then you have to take control and not give it over to someone else. Control or be controlled; the choice is yours.
2 comments
Thanks for sharing this information. Your credit health and credit worthiness is important !!!!!
Thank you for this post, I was just contemplating getting a loan to consolidate my debt but I feel like i should be able to snowball and get it taken care of within the year and not have a new debt!!! Thank you now to set up my repayment terms