How to Lower or get rid of your debt in 8 easy steps

Having any kind of personal debt is never a fun thing. What is even worse is when you leave it up to the last second to deal with. When you leave it to the last minute you end up with a bigger mess than you want.

Debt management

Below I have 8 steps you can take to help either cut down the debt or eliminate it completely.

1. Write down everything you spend money on. I don’t care of it’s a $4 cup of coffee or a $10 happy meal. Write it down. You are doing this for two purposes. Number one, you are trying to figure out where your money is going. Number two, you are trying to figure out which costs are fixed and variable.

Once you begin to separate the two, it will make it easier for you to curb your spending. Separating the two will make it easier to decide what spending to keep and what to cut down on.

2. Take what you earn each month and subtract it from your budget list. If you are coming out with extra money at the end of each month, than use those extras to pay off the debt. If it comes out being less, than you need to cut down on some of the variable spending. In other words, that $4 cup of coffee you buy each morning can be left out. Start making the coffee at home. It all tastes the same anyway.

3. You should also look at your fixed spending. Can your mortgage be lowered in anyway? Look into it. If you can shave some money off of your mortgage each month, this is a few extra bucks you can use to pay down your debt.

4. Try boosting your take home pay in some way. It might mean taking on an extra shift. It might mean picking up a few extra projects at work. Either way, this will help you out in a big way.

Debt control

5. Look at your w-2 at work. How much are you having withheld on your w-2? Sometimes the size of your tax refund indicates your withholding too much. Just go back in a reduce the amount you have withheld on your w-2. This might hurt you in the bank book right now, but it will help you in the long run.

6. Make a list of your debt and how much you owe. This is the only way you will know exactly what you owe and to who.

7. Focus on paying off the debt with the highest interest rates first; also find out if your might qualify for loans for bad credit. Get them out of the way. Once these are done, than you can concentrate on the lower bills.

8. Try to negotiate a switch of credit cards. Take your highest charge balances and choose a low-interest rate card to switch to. This will kill two birds with one stone. Be careful with this one though. You need to read the fine print for these deals first. This way you won’t be signing a deal with the devil.