Finance & Marketing

There are only two ways to get out of debt and they sound ridiculously simple but still people struggle to reduce their debts. These two ways are to make more money or to spend less money. If you make more, you will have more to put towards the debt. If you spend less, you will have more to put towards your debt. In fact, I’ve just thought of another way to reduce debt ” make more money and spend less of it. Then you will have even more money and get out of debt quickly.

I bet you’re thinking, wow like I didn’t already know that, tell me something new. Well, the problem is that most people can implement these ideas but they can never stick with them. They don’t have the discipline and patience to see the strategy through to the end.

In fact, the majority of people with debt problems haven’t suddenly landed in a huge pile of debt but more than likely worked at it. It may have taken years before they finally realized that their spending habits were out of control. All of a sudden they will see the debt for what it is and want to get out of debt fast.

So the question is, if it took years to get the debt problem why should people expect the solution to take minutes. Getting out of debt is just like getting into debt. It could take months or years to achieve. The important thing is to implement a strategy and stick with it. Chip away at the debt mountain that you have created and it will eventually crumble.

And this is a good analogy for your current predicament. Persevere, even if the debt is large and there is no end in sight, and you will find that momentum will build. With increased momentum the debt will crumble. In practical terms, when you are paying off a portion of the capital that you owe along with the monthly interest chargers the debt will reduce quicker than ever before.

So, how do you make more money ? That’s a good question that millions of people ponder everyday. You could get a second job. If you already work a lot of hours per week this may not be a good idea. It’s your call. don’t work to hard that your health is at risk. That would be counter productive.

If you find something enjoyable or interesting then this won’t be a stressful. A hobby like wood turning can be turned into a profitable sideline of making ornaments and selling at flea markets. This could be an acceptable second job that could bring some useful monthly income.

Or you might consider having a home clear out and selling all the stuff you no longer need. Have a garage sale or stick the items on Ebay. You might not make a fortune but it can certainly help towards your debt problem.

Having said this, finding good ideas to make more money is probably far more difficult than finding ways to spend less of the money you already make.

Most people think they don’t need a budget or are too lazy to set one up. This is the first step to getting out of debt. A budget will tell you how much money you can spend each month and what you are currently spending it on. This information is essential if you want to stay in control of your finances.

Working out how much you have to spend should be straight forward. It is your monthly pay check provided you are having tax taken out by your employer. Your aim is to have more of this than you spend each month

Now sort out how much you spend. Record every transaction over a month. You want to divide these expenses into essential and non essential expenses. Essential expenses are things you must have in order to survive. So food and a place to live are essential expenses. Other items may not be essential and can be scrutinized more carefully.

Having said that, you may be living in a lavish apartment that is beyond your means. You may even consider getting cheaper accommodation. In terms of grocery shopping, do you really need a large selection of cheeses and do you eat all the fresh food you buy or do you throw out some of it.

Non essential items are things like entertainment. There are all sorts of things that can fit into this category that you can think about cutting down on. For instance, one vacation a year rather than two or three. You certainly need rest and relaxation from time to time but are you over doing it.