Being in debt may feel like you’re being economically degraded. But being in debt nowadays is common and it’s not the end of the word if it has happened to you. With ever increasing costs of food and gas coupled with more and more demands on our lives and a constant need to fulfill those demands, people often run out of money. Credit cards can lend a temporary hand but without proper planning a person might feel the pain of debt sooner rather than later.
Having a negative balance on the books is a burden. It is so because whatever you earn doesn’t get added to your bank account but rather fills the gap that has been created due to the debt you’ve created. Being in debt not only affects your current economic condition but also your future plans. Undoubtedly, getting out of debt as soon as possible is the utmost priority that a person should have.
Filling the chasm in your wallet and bank account is more important than building your personal empire. A debt makes your economic foundation weak and hence your plans won’t be concrete as your base is not completely ready. How does a person get out of debt?
Step 1: Cut Down On Costs
Easy to say but, hard to execute. With the monthly income you have and a debt hanging down your neck, it is best preferred to cut down costs. This does not mean that one has to starve or sleep hungry; it’s simply lowering your standard of living and comfort which will help you save money. Being practical is the key here.
Step 2: Prioritize Expenses
Debt is like a purple patch than can be removed. But, if you let it exist for long then it might transform into something chronic. The first thing on your ‘to do’ list every moment should be to cut down the deficit. Prioritize your expenses. Categorize them into needs and wants. Only spend on ‘wants’ when your budget allows.
Step 3: Negotiate Your Rate
Keep contacting and calling credit card agents. If there is a failure in convincing agents then, don’t give up. Keep trying. Persistence is the key. Request them to reduce the interest rate. If you have a good recent history of making your payments on time, you have a better chance of getting a lower rate. If you threaten to cancel your credit card and move the balance, this also helps your case out. And if you have an improved credit score you may also qualify for a lower rate. The bottom line here is to contact them, ask and negotiate.
Step 4: Transfer Your Balance
Get into plans that have 0 percent interest rates and transfer your balance there. This will help you pay off the debt faster since each payment will go toward the principal rather than interest. The key here is to pay off the balance in full within the trial period (typically 6 months or 1 year). Also be sure to make every payment on time or else you’ll lose that wonderful zero percent rate.
If you’ve gone through the 4 steps you will gradually see your debt decrease and your overall financial situation improve. Once you begin to see progress this will give you the motivation to continue on this path. Before you know it you’ll be able to breathe freely knowing you no longer have the weight of debt on your shoulders.