Thursday, November 30, 2023

Escaping the Debt Trap! Practical Steps to Free Yourself From Debt.

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George Soto
George Soto
George Soto is a national journalist with nearly 15 years. While studying journalism at Chicago, George found a passion for finding currency stories. George mostly covers cryptocurrency, NFT, blockchain and other business related issues.

As much as we all want to avoid getting into debt, it’s sometimes just unavoidable, and it is undoubtedly one of the most stressful situations that many people face. The unfortunate thing about being in debt is that it breeds, and it’s easy to sink deeper and deeper into financial struggle. With interest accumulating, you want to get on top of the debt as quickly as possible, but how? It’s a situation that a lot of people have been, or are currently in; so if this applies to you, keep reading to learn some ways to start pulling yourself out of the trap.


Know What You Owe

The first thing you need to do when trying to get on top of your debt is to be aware of what you owe. This means writing a list of every loan and credit card you owe money on, and how much you owe for each. Breaking it down may look shocking at first (don’t panic) but it will help you see what needs to be paid and when.


Talk to Lenders

As tempting as it is, you shouldn’t avoid calls and letters from the banks or credit card providers. This is a mistake lots of people make and the truth is, it just makes the situation worse. The best thing to do when you get into financial struggle is to talk to the lenders and discuss a plan with them. Keep them updated and find out what your options are.


Make a Budget

If you really want to get out of debt, you need to make some lifestyle changes. A great start is to create a budget to see where you are with your finances. In the budget, take into account essentials, like rent, food, petrol, etc and then see how much is left over after paying those. The aim is to increase the amount you have left over after paying the necessities and put that extra money towards paying off the debt. This may mean trimming expenses until the debt is paid off, for example, by eating out less or cancelling a gym membership. The more excess money you have to put towards the debt, the sooner it will be paid off.


Make a Plan

Once you know how much you owe, and how much excess money you have to put towards your debts, you can begin to decide on a strategy to eliminate it. Firstly, look at the total monthly repayments for each debt, and decide which you want to tackle first. To ensure you don’t forget to make payments set up automatic transactions each month for the debt you’re paying off. Keep checking the balance of your debt and it will start to decline. Don’t stop until all of your debts are paid off.


Getting out of debt is certainly not as easy as getting into it, but if you stay dedicated and follow these steps, your finances will be on the road to recovery before you know it!


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