5 Ways To Get Out Of Debt On Your Own

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It can feel like the end of the world when your finances get out of control. When you have debt spread out over several different credit cards, a mortgage, student loans, and everything else, you may feel as if you can’t do it alone and that you need some help and guidance to reverse the damage.

It’s true, there are plenty of services out there that can help you out with your debt and recover financial credibility – for a fee. But before you take that step. It might be wise to try to do it all on your own. If you can, you will avoid having to pay a consolidation company and save that extra money you might otherwise have to spend.

1. Face It

When you have too much debt, the natural tendency is to hide from it. Stick your head in the sand and apply avoidance techniques every time the issue comes up. The problem with this approach is that it just delays the inevitable. You can keep yourself afloat for a while paying only the minimum payment, but if you really want to change your circumstances, you have to face the music. Take the time to tally up all your debts so you know exactly how much you owe. Then total up all of your income so you can start to strategize how you will change those numbers. This gives you a starting point to work with.

2. Use A Balance Transfer

 You can use a credit card balance transfer and move the total balances you owe to a single card with a lower interest rate. This can lower your payments and make it easier to pay off. Just make sure that before you make this move, that you’re actually going to save money in the process. If you get a lower interest rate to cut the cost but end up extending your payment terms, it may not be worth it to make the move.

3. Change Your Spending Habits

Start paying attention to where everyone of your dollars is going. Make a budget and keep an actual record of everything you spend. Many people use either the 50/30/20 plan where 50% of your money is used on essentials, 30% is dedicated to wants, and 20% is set aside for savings. There are many other different budget plans you can use, so with just a little research you can find one that works right for you. Once you have your budget, stick to it and don’t allow temptation to overtake you.

4. Take On A Side Job

 If the money coming in is not enough to cover the cost of money coming out, consider getting a side job. You need to have enough cash coming in to pay down your debt and still live like a human being. Your ultimate goal is to earn enough money so that you have more coming in than going out. This is the only way you will be able to work your way down to a debt-free situation.

5. Borrow From Your Life Insurance Policy

Borrowing can be a scary thing when you are struggling with debt. After all, that’s what got you into trouble in the first place. But if it comes down to borrowing against the equity in your home or borrowing from your life insurance, a life policy may be your best choice. In most cases, you are allowed to borrow up to the total cash value of the policy to pay down your debt. You can always pay it back but most insurance companies won’t require regular payments as long as the total loan is less than the actual cash value of the policy.

The bottom line is simple. Your negative debt situation can be distressing, but it will not get any better until you decide to do something about it. Just keep in mind that getting out of debt takes time and commitment, but with a concrete plan of action it is possible to recover and reclaim your life back.

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