Almost everyone has debt, whether it be in the form of a mortgage, personal loan, or credit card bills. Sometimes, having debt is necessary to achieve your goals in life. But if you are already struggling to pay your debts–or nearing the point of difficulty–it’s best to avoid blowing your debt bigger than it already is.
Here are the best anti-debt strategies that many debt settlement attorneys recommend:
1. Stop putting charges on your card
When you’re already struggling to pay your credit card bill, don’t add to your problem by putting more expenses on it. Instead, use cash as much as possible. Now, this is easier said than done, especially if you have a lot of other bills to pay. However, adding more expenses on your cards can easily lead to a balance, which, in turn, can negatively affect your credit score.
Stop using your credit card until you are in a more comfortable financial position. Reserve it for emergencies, not for coffee or unnecessary luxuries. If you want to eliminate the temptation to use your credit cards altogether, you can opt to freeze your credit or just cut them up into pieces.
2. Don’t take out a loan you can’t afford
Don’t take out a loan, whatever type of loan it might be, if the monthly payments will be pushing your budget. Otherwise, you might find yourself in a bind when you come across an unexpected expense and don’t have the additional money to pay off your loans afterward. Missing a loan payment, of course, can lead to late fees, which can snowball your debt quickly.
3. Negotiate your interest rates
You already have a massive amount of debt to pay off, and one wrong move can balloon your deficit dramatically. Is there any way you can lower the monthly payments and save more money for rainy days? Yes, there is.
Approach your creditors and negotiate for a lower interest rate. You might be able to get a lower rate if the creditor sees that you have a good payment history. However, this always depends on the creditor’s discretion.
4. Get help from a debt counselor
A debt counselor gives clients personalized advice and guidance on better debt management. They can help you strategize your payments, create a better debt management plan, and avoid falling into deeper debt. If you feel that a debt counselor will be beneficial for you, go ahead and find one in your locality.
5. Find other ways to save money
If your debts are eating a big chunk of your monthly budget, seek other ways to save money so you can pay off your debt faster. There are a lot of ways you can go about this. For example:
- Sacrifice holidays, trips, events, and other unnecessary luxuries for the meantime.
- Modify your grocery list to cut down your food budget. Choose cheap, whole foods instead of expensive snacks and take-out.
- Find applicable scholarships for children if they are still in school.
- Be sensible when shopping for gifts, clothes, toys, etc.
- Cut down on gas by carpooling or taking public transport.
- Save on utility bills by conserving water, energy, and gas.
When you’re already burdened by debt, the last thing you want is for it to balloon. Hence, if you want to get your finances back on track as soon as possible, use these strategies to avoid increasing your debt even further.