People fall into debt for many different reasons such as medical costs, schooling, starting up a business and purchasing a home. In most circumstances, the debt cannot be avoided. However, a large majority of people fall into debt because they cannot control their spending habits. They basically spend money that they don’t have on purchasing a new car or spending on credit cards for example.
Is The Debt Manageable?
This is a fairly simple question to answer if you are spending more than you have coming in then NO. If you are paying large amounts of money each month towards interest on your debt, then again, NO! How Can I Deal With The Debt? This will take time depending on how big the debt is. You need to recognize that you have a debt problem first of all that is the biggest hurdle. Once you have recognized the problem we can start taking various steps in solving the issue.
Each month keep a document of exactly what is coming in and when and obviously what expenses you have and when they are going out. Work out how much you have left each month and keep a little aside for things such as emergencies, birthday’s, annual bills, etc Listing Income / Expenses. This is an important issue. You need to list all of your incoming and outgoing expenditure to ensure that nothing is missed off that will leave you short. By doing this you are able to budget and plans you prepare to do battle with your debt.
For one month, try spending money on only the necessities such as food and bills or normal living expenses. This will be a good leveler to see if you can do it and also whether you find it hard. It may actually be a lot easier than you think, you won’t know unless you try.
Work Out A Strategy
Once you have acknowledged the debt and have spoken with family/friends – make a plan! Work out exactly what your strategy is to becoming debt free is and build goals with small rewards to help keep you motivated.