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The good news
The good news is that managing your debt might be easier than you think. There are numerous things you could do to get your debt under control and even get it paid off.
Total of your debts
The first step is to determine how much you actually owe. Did you just let your debt built up and kept pushing those bills and credit card statements off into a corner?| Then you need to sit down and do a list of everything you owe along with the interest you're paying on each debt. One good way to do this is with a spreadsheet. Just list the name of the creditor in the first column, the amount you owe in the second column and the interest you're paying in the third. Next, sort the results so that the debt with the highest interest rate is at the top of your list.
Double up on your payments
Now that you know which of your debts has the highest interest rate (and is costing you the most), start paying it off by doubling up on your payments. As soon as you get its balance paid off, you can use the money you now have available to begin paying on the card with the next highest interest rate and so on. This is called "snowballing" credit card debt and has proved to be a very effective way to manage debt.
Restructure your debt
Another technique that has proved to be effective in managing debt is to restructure it. The way that you do this is by contacting your creditors and negotiating with them to reduce your interest rates so you can get your debts paid off faster. You can also ask for a grace period during which time you wouldn't make any payments at all. If you could get one or two of your creditors to agree to this, you would then have time during which you could increase your payments on your other debts to reduce their balances substantially.
If you've never sat down and created a budget, this could be a great time to start. You will need to first track your spending for probably a month so you'll know where your money is going. Be sure to write down everything you spend – right down to that takeout pizza you had for dinner. Next, divide your expenses into logical categories such as food, clothing, shelter, insurance, transportation, medical expenses and the like. This should give you a clear-cut picture of how much you're spending for what and where you could make cuts. Start with the goal of reducing your monthly spending by at least $200, which would free up money you could use to pay down your debts. Most people who go through this exercise find that the easiest places to make cuts are in food and entertainment. If you shop carefully, take advantage of store specials and use coupons, you should be able to reduce your grocery bill by several hundred dollars a month.
Refinance your home
If you have equity in your house, now would be a great time to do a refi because mortgage interest rates are so low. Let's suppose that your home is worth $150,000 but you owe only $100,000 on your mortgage. A refi would free up something around $40,000, which could be more than enough to get all of your debts paid off.
Choose debt settlement
A fifth way to manage your debt is to let us do it for you. Our debt settlement plans have helped thousands of clients get out of debt in 24 to 48 months and save thousands of dollars as well. Call our toll-free number so we can explain how debt settlement works and what it could do for you. You won't regret the call.