Getting out of debt and staying out of debt is not the same thing. While most debtors can get help from the professional companies and get out of debt, staying out of debt is not so easy. You have to be financially disciplined in order to stay out of debt in the near future and stop hurting your score. If you’ve amassed a huge amount on all your credit cards and if you’ve not managed the payments in the right manner, it is most likely that the creditors are calling you and harassing you in order to recuperate the money. You need not worry if you’re in such a situation as there are some expert ways in which you can seek debt relief on your own. Though the professional companies are there to assist you, when you can take certain steps on your own, why will you unnecessarily pay the fees to the professional companies? Have a look at some steps that you can take in order to eliminate your debts on your own.
- Make a budget: The first step that you need to take is to craft a frugal budget that will eliminate all the unnecessary expenses that you make during a month. When you’re in debt, you have to split your payments to different cards and if you don’t save money, you won’t be able to pay on time and this will hurt your credit score badly. Formulate a budget following which you can get back a firm grip on your personal finances. Evaluate the budget at the end of the month so that you can keep space for improvements.
- Follow the debt avalanche method: When you’ve accumulated debt on all your credit cards and now you find yourself deep in debt, you can follow the debt avalanche method. While some feel that this is the best way to get out of debt on your own, some others feel that the debt snowball method is better. You have to make a list of your debts from the highest to the lowest interest rate and then start paying off the highest debt first while making the minimum monthly payments on all your cards. As you repay the entire amount on the highest interest debt account, choose the nest one with the second highest interest rate. This way you can save your bucks in the long run as you won’t accumulate money in the form of interest rates.
- Snowball your debts: The debt snowball is a favorite for most debtors as this gives them a mental satisfaction about gradually repaying the debts one by one. Here too you have to make a list of the debts, but from the smallest balance to the highest outstanding balance. You have to start paying off the smallest balance while making the minimum payments on all the other cards. Soon after you repay the card with the smallest balance, you must choose the next card with the next smallest balance.
Apart from the above mentioned ways, you can also choose to transfer your balance to a low interest rate card. Shop around to grab the card with the lowest rate and transfer your entire high interest balance to that card within the introductory period to reap small and affordable monthly payments. However, when you seek debt relief, make sure you assess your personal financial condition and then take the plunge.