The Only Way To Get Out Of Debt
What causes us to get into debt? Spending more than we are earning.
So in order to stop getting deeper into debt you are going to have to start taking some drastic steps.
First of all, you need a true, accurate picture of how much you owe. Yes, this is painful, but you will never get out of debt if you don’t figure this out.
You need to figure out the total amount of debt you owe, and what your minimum monthly payments are. Then you need to figure out your monthly living expenses – for mortgage or rent, utilities, garbage pickup and water, household maintenance, gas or bus fare, barbershop, groceries, medicine, life and health insurance, etc.
Then, you need to add that all up.
And now you finally have a true picture of your finances – so it’s time to make some decisions.
Do you spend more every month than you earn? Something’s got to change. Some people have wiggle room – they can cancel the cable TV, stop eating out at fancy restaurants, quit the gym membership they never use, brown bag their lunch instead of buying lunch every day.
Some people have cut out every extra expense and STILL aren’t earning enough to cover everything they owe. At that point, you’ve got two options: Take on a second job (or find another way to earn more money), or reduce your monthly payments.
To reduce your payments, you have several options. You can negotiate directly with creditors, you can go to a non-profit credit counseling agency – only go to one that is approved by the National Foundation For Credit Counseling, because there are a lot of ripoffs out there! – or, worst case scenario, you may need to consider declaring bankruptcy.
But one thing is for sure – if you keep going the way that you’re going now, you will only sink deeper into debt.