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Make A Monthly Budget
Your budget should contain only the essential items such as groceries and utilities. Before you go shopping, make a list of the items you need to buy. Calculate the approximate cost of the items and write this on your shopping list. This can help prevent you from overspending or buying items you did not budget for as you know this will increase your total bill.
Control Your Spending
Poor spending is a habit that you have to let go if you want to control your finances. Overspending normally leads to a deficit so you find that you cannot pay your bills on time and end up getting penalized. Most people who overspend do so not because they need the items, but because they want them. Before you buy something, ask yourself what you will be using it for and if you could live without it. You might be surprised to find that some items have no use at all.
Keep A Shopping Journal
Keep a record of what you buy on a daily basis even if it is a small purchase. It will help you track your expenses and also show you what you mostly purchase.
Calculate Your Total Debt
Take all your credit cards and list them with the balance and interest rate on each. This can help you know where you stand financially. You cannot work towards getting out of debt if you do not know how much you owe.
Stash Your Credit Cards
Put away your credit cards or destroy them so that you will not use them any more. You will make very little progress if you continue to use your credit cards while trying to clear your debts. The next time you get a credit card, make sure that it is a low interest card. Transfer the balances on credit cards that have high interest rates to one with a lower interest rate to prevent the interest from causing your debt to accumulate.
Restructure Your Mortgage
If your debt situation is really bad, you could negotiate with your creditors to temporarily lower your interest rates or change your payment plan. If you can get a lower interest rate, you could look for ways to make more money to enable you to make the payments.
Get A Home Equity Loan
If you are a homeowner, you might be able to get a home equity loan that you could use to pay off your debt. Before you start paying off your debt, combine them into one debt so that you can make a single payment at a lower interest rate. Contact your local bank to find out how much they could lend you as a home equity loan.
Maintain Contact With Your Creditors
Do not ignore phone calls and letters from your creditors as it will show that you simply do not care about your debt. They may want to negotiate with you instead of turning you over to a collection agency.
Review Your Credit Report
Request your credit report and go through it to make sure that the information there is corxrect. If you find any mistakes, contact your creditors and ask them to make the necessary adjustments.