The following is a guest post…
If you find yourself deep in debt and have reached the point where you are getting collection calls every day, it is time to take some positive steps to dig out of the financial hole you have dug for yourself.
You may be in a bad financial position because you lost your job. You may be struggling to pay your bills because you just had to have $10,000 of dental work done and had no insurance coverage.
We all have things happen in our lives that can cause us to fall on hard times. While you may be able to avoid hearing from debt collectors for a while, you can not ignore your financial problems. You should know exactly where you stand today by doing a personal debt assessment. Whatever caused your financial free-fall is not important. What is important is that you take steps now to rebuild your financial life
1. Put yourself on a strict budget
If you owe a lot of money, you can’t keep spending your funds like you have absolutely unlimited funds in the bank. Cut back on all extra expenditures and put the money you save toward paying down of your debts. You might have to avoid going out to dinner as frequently. Perhaps going to movies on Friday night can be put on hold for some time, as well. The point is that you try to make hamburger instead of steak decisions at the very least, until you find yourself in a more financially stable position.
2.Cut up your credit cards
Cut up your credit cards and pay for everything you need with cash. It may be difficult to let them go, but in the end you will likely free yourself up to spend more wisely, and to pay down debt. You will be surprised to see how much further your money goes when you have to reach into your pocket and pay cash for all your purchases. As tempting as it may be to get a credit card, in the end it will hurt you more than it will help.
3. Find a second job
Bring in extra money by taking a second job. It does not matter if you only work a few nights per week delivering pizza or if you use the Internet to sell things on eBay. The point is to increase the money coming into your household so you have more money to pay off your debt. Supplemental income jobs are all around if you’re willing to put in a bit of work to find one that will work with your skill set and schedule.
4. Consider a roommate to help share expenses
If you have an extra bedroom in your house, renting it out to a college student can free up some of your money so it can be applied to your debt. Just be sure to check out your roommate before letting him or her move in.
5. Change your attitude toward money
What you were doing in the past with your money obviously did not work too well. Change your spending and saving habits and, once you get out of your current financial hole, you will not get yourself into trouble again.