Dealing with debt is no laughing matter, nor is it an easy one! There is discipline to getting out of debt that is much more difficult to master than the art of getting into debt in the first place. While a daunting task it is certainly not impossible, and based on a recent debt consolidation guide by Zopa there is a very structured and effective way to beat debt and take back control of your financial future!
First things first, you need to organize and add up your various sources of debt and the interest you are paying monthly based on those debts. Next, you simply add up your earnings and deduct all of your monthly spending. From there it’s quite easy to see how much you have left over to pay down your debt, and where you are able to cutout your monthly expenses. As the old saying goes, spend less than your earn and you will never go broke.
After working up a simplified financial plan you can begin to focus on debt consolidation options. This will allow you to determine a set number of months until all debt is repaid, and hopefully to negotiate a lower monthly payment with a lower interest rate. Make sure to focus in on an loan fees, the APR you will be paying, and if there are any early pre-payment penalties should you be able to extinguish the debt earlier than expected. In the end you just need to make sure that the interest and fees you are paying in total are substantially less than your current financial mess.
From here on out, once you have paid off your debtors then it’s all about financially maintaining yourself. Make sure you avoid taking on new debts with high interest rates, after all this is how you got yourself into this mess to begin with. Keep a running budget to ensure that you are only spending what you can afford, and putting some money away for a rainy day at the same time. A financial cushion will help you to keep any away any new debt when you run across an unexpected expense. Run an annual credit report to check your scores accuracy and make sure you are paying your bills on a timely basis.
By keeping the above financial plan of attack in mind you can keep yourself debt free and live a financially happy and secure life!