People fall into debt even after sticking faithfully to their budget. Most times, unforeseen circumstances may lead to debt.
Tackling debts takes time and effort, but staying consistent and combining strategies can successfully help one to break out of debt.
Here are seven ways to break out of debt.
SET UP A BUDGET
A budget is an itemized summary of intended expenditure and revenue. Setting up a budget is not magic, it is a representation of financial freedom and a life with less stress. How then do you set up a budget? Here’s a suggestion – Calculate your monthly income, allocate 50% of your income for needs,20% for wants and 30% for savings –
Separating wants from needs can be difficult but if you are eager to get out of debt as fast as desired, you may decide to pend your want until you have your savings and debt under control.
However, tracking or recording your spending is very important. Your income, expenses and priorities change over time so it is expedient to adjust your budget accordingly.
GET MORE THAN ONE STREAM OF INCOME
Creating multiple streams of income allows an individual to have various cash flow sources. This puts you in a better position to be prepared if one source of income fails. Multiple streams of income allows you not only to get more money but also break out of debt because you have what you can fall back on when one stream of income fails. The interesting thing about this current digital age is that there are lots of ways to make consistent extra money whether that is passive or active.
AVOID THE COMPARISON GAME
Comparison increases debt. Stop trying to keep up with the Joneses. Remember, you are living like no one else so now so that you can live and give like no one else later. Run at your own pace, do not try to impress any one.
LEARN TO SAY NO
This is very important when it comes to spending. Make it a new part of your vocabulary if you want to break out of debt. Embrace it, love it because when it comes to spending, you will say it often.
FIND ACCOUNTABILITY PARTNER(S)
Getting out of debt is not easy when you have to say no to friends, concerts and going out to eat. That is why it is important to find someone you trust to hold you accountable to your financial goals .It can be your spouse, friend, or even your parents. Just make sure it is someone who will actually call you out if you step out of line.
SEEK FINANCIAL HELP
Financial help from experts doesn’t have to be expensive. There are many authorities out there that can help you with ideas / initiatives to better your finances by providing you with expert advice . Do not suffer in silence, get help when you can. Worrying too often about financial stress can stop us from taking any remedial action that will truly make a difference.
PAY ONE DEBT AT A TIME
Focus on paying one debt at a time. Apply extra income towars debt and make minimum payments on others. When you focus on one debt at a time, you are likely to pay it off in less time and the impact of paying a debt is lessened on you.
