As you can tell from our previous posts about budgeting and getting out of debt as well as our responsible lending statement we here at Check City are huge proponents of making wise decisions with your personal finances. Whether it’s how you use a cash advance or how you control your credit card spending it’s always important to not take on any debt that you can’t afford to pay back.
When you are in a lot of debt, it can be hard to understand how it is going to be feasible to get back to financial freedom. There are a lot of people that struggle understanding how they are going to slowly but surely climb out of their debt. As you are working on getting out of debt, you will want to create a plan. The plan that you create can ensure that you will be on your way to financial freedom as quickly as possible.
As you are starting to pay off your debt you will want to do all that you can to pay more than the minimum payment. More than likely the minimum payment on your card is going to be about two to three percent of your outstanding balance. When you are only paying your minimum payment, you will find that you end up paying a lot more in interest. Each month your interest will accrue and you will end up paying more the longer you are in debt.
It Starts With Cutting Costs
To ensure that you are able to pay more than your minimum payment you may need to cut costs in other areas of your life. As you are cutting costs in other areas of your life you will end up saving money in the long run. If you have more than one credit card that you need to pay off, it is important that you know which card has the highest interest rate.
Target Your Highest Interest Loans First
Focus as many resources as you can toward your highest interest rate. As soon as you pay off that card, you will then want to focus all of your energy on the card that has the next highest interest rate. While you are focusing the majority of your resources on one card, you will also need to be paying the minimum payments on the rest of your cards.
As you are working on paying out your credit cards, you may want to call your creditor. When you call your creditor, you may be able to renegotiate the terms of your debt. When you are working on the terms of your debt with your creditor, you may be able to lower your interest rate. There are a lot of creditors that will lower your interest rate if you simply ask. Give your creditor a call and talk about what you can do to pay your debt off quickly.
Plan Ahead to Avoid Future Debt
When you are deciding what the best way to get out of debt is, you should also understand how to keep yourself out of debt. When you have paid off all of your credit cards, you should realize how important it is to keep yourself out of debt. As you are keeping yourself out of debt, you will need to change your spending habits considerably.
Creating a budget for yourself is a great way to ensure that you are going to spend less than you make. While you are working out a budget for yourself you have to understand how you are going to keep your budget reasonable. Although you want to save money, you have to be able to provide for yourself adequately. You want to be sure that you have enough money to provide for your living costs.
Finally, you should understand that you may need to file bankruptcy. Filing bankruptcy is often not the most sought after option, but it is important to understand that there are instances when filing bankruptcy makes the most sense. Talking with a financial advisor to ensure that you are able to make this decision wisely will probably be your best option.
If you should decide to file bankruptcy, you will want to work with a trusted financial advisor. By doing this, you can navigate the bankruptcy waters without any problem. It can be scary to file bankruptcy, but by having someone to help you through the process you can be sure that your questions are answered and that it isn’t too scary.
Getting yourself out of debt can be frustrating and difficult, but it is important that you make this a priority in your financial life. Paying of your debt quickly is your best financial option and it is important that you get started paying off your debt quickly. Make a plan for yourself today to ensure that you are able to start paying off your debt as quickly and as efficiently as you possibly can.