You have made some bad financial decisions and find yourself in a debt trap. The good news is that if you actively work towards it, you can get out of it. It is not easy, but don’t give up. You didn’t get into this mess in one day, so do not expect a quick turnaround. Here are a few tips for success.
• Have a single credit card. Cut up and throw away all maxed out and multiple credit cards. Keep a single one and use it strictly for emergencies. Stop using department store cards or any other cards you will have to make payments on.
• Track your expenses. Keep an account book or simply a notepad and write down everything you spend, no matter how small. It sounds difficult, but you will be amazed at the results. You will notice how the small, impulse purchases add up.
• Make an expense budget and stick to it. After figuring out which areas you are spending the most, try to cut back. Shop groceries in bulk where you can, always carry a list and try couponing. These might sound silly when you have a huge debt, but it all adds up. And it is a good habit to keep even when you are debt-free.
• Write down your debt. It is always a good idea to make a spreadsheet of your various bills, creditors, and monthly payments. This helps you keep track of your debt and prevent you from being overwhelmed.
• Pay it off. The most difficult part, but possible if you take babysteps. Figure out which ones to pay off first, probably the ones charging the most interest.