Getting out of debt is going to be an uphill battle. The bills keep piling up. The money isn’t there to pay for them. You’re further and further behind in debt. It’s a vicious cycle that never ends. But it can. A person can overcome debt by spending less and saving more. This will bring more into the household than going out.
Take note of how many companies you owe, the amount of money you owe and interest/penalties/fees (if available). Include credit cards, utility bills, car payments, mortgage and so on. With credit cards choose one of two directions to handle this situation: pay the lowest amount owed first or pay the ones with the highest interest rate. While you’re at it, call the credit card companies to see if a card with a lower interest rate is available. Try to consolidate all credit card debt into one card with a lower interest rate, if possible. When paying off the bills try your best not to spend any more on the credit card until the previous balance is paid off.
Now it’s time to track and cut spending. Keep a record of where every dollar is going in a journal or a computer program. Keep receipts for everything purchased–every receipt. Record and categorize expenses. At the end of the month take a look at how you’re spending. The weak points are indentified. Those are the ones to cut out from the budget. Keep doing this to make sure you’re on track.
Trim monthly bills by tacking the larger bills paid each month. Most of the time, the larger bills come from the landline/cell phone, internet and utilities. Call each of those companies and lower the bill. Lower interest rates on mortgages and car loans, if possible.
Pay bills as it comes in instead of all at once. Doing this will help a person see what is spent n real time. The person will see how much each bill costs as its coming in. This gives a person time to analyze the bill and see if there is anything you can do to cut back on the bill. Some high charges are a seasonal effect. If so spend a little less to make up for the expensive bill.
With this plan a big chunk of money will be saved up. This will help with the holidays where people spend more. This plan will have enough saved to spend a little extra. Have a chat with a bankruptcy attorney for more information. There is a way out. A person has to be motivated, patient, persistent and allow time for improvement to conquer this financial burden and live a debt-free life.