How to Overcome Debt
We all manage debt in some form, and we all wonder how to overcome debt.
Payments always need to be made for our day to day utilities such as, power, gas, water, phone, etc. Even with a small amount, of debt, payments must always be met, or it will soon get out of control. For others, debt can be more complicated, and even overwhelming, especially when you are juggling payments and end up “robbing Peter to pay Paul” and still trying to keep up with your regular utility bills.
How to Overcome Debt:
If your debt has become overwhelming, you are most likely, to be confused and always asking yourself how to overcome debt and where and how to start.
There is a way out and for some difficult times may be ahead.
Create a Budget:
First you need to get a clear picture of how much you actually owe, how?
List all of your debts, separate your essentials like your utilities, rent/mortgage, etc., from all other debts and include; the total amount of each debt, monthly payment and the date its due. List each debt from largest amount to the smallest amount owed.
Tips to develop a budget
Create a monthly Budget Spreadsheet.
Personal Budget Spreadsheet
Always make sure you pay your essentials first and on-time.
Late payments often incur extra fees, and compound interest putting you further into debt, so make sure you pay your bills on-time each month. But I’m in so much debt you say, I can meet the payment schedules, and I’m only going, under! Don’t, over stress; there is a way out, and we will go into the, “How to Overcome Debt” in more detail soon.
With all the calendar apps available for your computer or smartphone, it’s easy to set reminders alerting you in advance when your payment is due. Another good way is to set up a Calendar Spreadsheet using MS Excel or Google Docs
Write your bill’s payment and due date. Then, the date you get paid.
Sometimes we get busy and distracted, and payments are at times overlooked, make the payment as soon as you can. It may be necessary to contact the creditor and advise, the payment has been made that it was an oversight on your part. Sometimes a default, maybe recorded and by notifying, at least your record will show you are proactive.
Tips to Remember Your Due Dates
Create a monthly bill payment calendar.
How To Manage Monthly Bill Payments:
Minimum payments is a simple way to get a balance.
Making a minimum payment doesn’t help in the long term for paying off your debts. But, it does prevent debts from growing out of control. Again the key is not to miss payments, as you don’t want to go into default.
Which debts to pay off first:
Look at the debts that incur the highest interest. Credit cards debt is often the one with the highest interest, make this a priority for repayment. If you have more than one credit card, or other higher interest debt, again pick the one that has a high-interest rate.
By looking at all of your debts you will notice some have a shorter term. These you may want to consider targeting first and paying off first, doing so will reduce your debt sooner.
Tips Calculate Your Debts
Download a Debt Reduction Calculator.
Debt Reduction Calculator
Protect Your Credit Rating:
By keeping in contact with your Creditor and making every effort to keep up regular payments and focusing on clearing these fast will keep you in good standing.
A good credit rating is easily lost and once lost can cause no end of future difficulties even for the simple act of setting up a phone account.
Create A Buffer:
Work towards creating a small savings buffer, emergencies arise and when they do having a small amount saved will make the difference of surviving or going under.
How do I say you ask? Always put aside a minimum of 10% of your earnings; make this a priority. Consider this 10% as money that doesn’t exist; it’s not yours. Soon you will see this amount grow and continue to grow.
When it has grown to a reasonable amount you can determine how to use it or part of, maybe clear a debt or debts, or something else.
The key is to keep saving that minimum and get into the habit of good savings and money management. Remember 10% is a minimum the more you can put aside will see your financial standing improve and grow.
What you say, I can’t afford that!!
Rewarding yourself when you have finally cleared a debt doesn’t need to be an extravagant holiday: it can be as, simple as, having a coffee and cake, a movie at the cinema with the family.
Set yourself a reward target once your finances are stable and you have a solid savings buffer, go on a holiday buy an investment property, a new car. It’s up to you but most importantly, keep budgeting, spend wisely and Save.. Save.. Save.
Get a Passive Income Stream:
Take the opportunity to start your own business. Having a second income, a business that will be guaranteed to generate income and secure your future is, the only sure way you will get out of debt and see your income rise.
Download a copy of my free book Your First Business a Beginners Guide
Starting an online business has never been easier and you too can learn how to generate income passively.
Click the button below to learn how.Start an Online Business
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About Darren Wilkins
Darren is a semi-retired senior executive and serial entrepreneur who runs a number, of successful businesses both online and offline.
With 30+ years experience in management and as a management consultant Darren has a can-do attitude and offers real practical advice that can be used for any business no matter the size, Darren is using his time focusing on online opportunities and building better businesses.
With global experience managing and directing multimillion-dollar mega construction projects and businesses. Darren has a wealth of practical experience to share and wants to help you and your business.