When a person is in debt it can sometimes feel like there is no way out of the overwhelming situation. The thoughts of how to get out of debt free can seem daunting. In order to reduce the stress and anxiety over debt is to know your situation and take steps to reduce your debt. One way to get out of debt free is to take each problem separately rather than being consumed with the big problem of debt.
Know Your Money
It is important that no matter your financial situation you know how you are spending your money. This is something that is accomplished through two things.
1. Know the Facts
It can be a stress saving situation if you decide to know how you spend your money. Take all the money that you spend in a month and track it. Determine how much you are spending on things such as utilities, entertainment, transportation, and groceries. Be sure to account for everything, because knowing exactly where you spend your money is the first place to gain power over your getting out of debt free.
2. Modify Your Behaviors
Another part of knowing your money is learning ways in which to decrease your expenditures. Take the list of places that you spend money and determine if there are ways that you can decrease how much you spend. In some cases to get out of debt free can be as simple as taking your lunch rather than purchasing lunch at work or carpooling to work.
Know Where to Focus
When trying to get out of debt free you think that you need to eliminate the debt. This can be difficult because all the debt is important to get rid of, so how can you know where to focus your funds. One can have many different types of debt and a rule of thumb is to pay off the highest interest rates first. However in some occasions if you have a balance that is low then it would be beneficial to get rid of that debt before moving on to the higher interest rates. You can try to reduce your interest through communication with your lenders. If reducing the interest isn’t an option through your creditors you need to look into other ways. Some of these ways may be transfer balance or consolidation loan that can reduce many of interest rates in to a single low interest debt.
It is important to understand that no matter how you choose to get out of debt free you will need to have the income to do it. There are times that one does not feel that they are making enough money to satisfy all of their needs. Sometimes we need to think about the little things that we can do in order earn some extra money.
- Requesting a raise. Requesting a raise may be one of the ways that you can increase your income. Take on extra duties or extend your shifts, these might be options that could help to increase the money you have coming into the home.
- Short-term freelance. If you don’t have the ability to increase your income through your full-time job, you might look into freelancing with companies that offer short-term jobs. Elance.com and oDesk.com are two sites that are like this. These sites offer the ability to be paid for jobs like writing, transcribing, designing, as well as many other jobs available.
Motivation Can Be Hard
Some people feel that while trying to get out of debt free you life is disrupted and might not be worth the challenges and modifications needed. Whenever you are trying to make a big change in life motivation can make or break the success. There are some basic things that can motivate us through life changes.
- Life goals
- Family growth
- Buying a home
- Winning a challenge
It is important that a person be willing to embrace the motivations that will help them get out of debt free. Use this to your advantage by creating things that can help you stay on track. This can be accomplished through checklists, or inspiration boards, or even a date to be debt free by. Any of these motivation tactics might help to self motivate you through the process of getting out of debt free.
It is important for one to see how it is possible to make small changes to simple problems that can help to change the entire outcome of your debt situation. Getting out of debt free can be one of the most complicated and stressful situations that you will ever be placed in, however with small steps you will be able to advance and succeed through the process of financial freedom.