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What is totally out of control?
If you’ve been unable to make even the minimum monthly payments on your debts for five or six months, or if you have debt collectors harassing you unmercifully, your debts are probably out of control. However, if you are making your minimum monthly payments but feel as if you were falling further and further behind every month, you can pay off those debts and without borrowing any more money.
Make a budget
The first step in paying off debts is to make a budget. To do this you will probably have to track your spending so that you'll know where your money is going. You should track every expense and then divide them into categories such as food, transportation, insurance, medical, entertainment, clothing and the like.
Where could you make changes?
You’ll need to next review all your categories and look for areas where you could make cuts. Most people find that they can reduce their spending on entertainment and food and probably clothing. Naturally, the objective is to cut your spending by at least several hundred dollars a month so you will have money to pay off those debts.
An action plan
While making a budget is a good first step, you also need to have an action plan or a plan for paying off your debts. A good way to do this is with a spreadsheet program. Make a column listing your debts followed by a column with your balances and a column with your interest rates. You could then order your debts by balances owed from highest to lowest or by interest rates from highest to lowest. Most financial experts say that you should first pay off the debt with the highest balance or highest interest rate. That way, you would free up the maximum amount of money you could then use to pay off the debt with the next highest balance and so forth. Alternately, you could decide to pay off the debt that has the lowest balance first. That way, you would see some immediate progress in getting your debts paid off, which could help keep you motivated.
Stick to your budget and stick to your plan
If there's any secret to paying off debts it’s stick to your budget and your plan. Sticking to your budget will generate the money you need to pay off your debts and sticking to your plan will help ensure that they get paid off.
If your debt is out of control
None of this will work if your debt is totally out of control. If this is the case, your best option would be to let us settle your debts for you. Debt settlement is really the only way to get your debts reduced short of filing for bankruptcy. National Debt Relief has helped thousands of families settle their debts and become debt free faster than any other form of debt consolidation. Contact us today. Let us explain debt settlement and how you could benefit from it. We charge no upfront fees. In fact, you pay us nothing until we have successfully settled your debts and presented you with a payment plan that you approve. Why let debt govern your life when we can take that burden off your shoulders and help you become debt free in a reasonable amount of time?