Increasing pressure to spend in the consumer society means debt is at record levels. The downturn in the world's economy, rising unemployment and other factors mean that millions of people are struggling financially. Borrowing money is often seen as a way out, but inevitably debt can make the situation worse for many people.
Many people lose hope as their debt levels increase, and a feeling that there's no solution is common. However, there are simple steps which can turn your personal finances around, and once you recognise and take control of the situation it can be managed. Getting out of debt isn't as difficult as many people believe. The following seven steps will set you on a path to freedom from debt.
1)Â Â Â Â Â Pay your bills first. As soon as you receive your salary or other income, put the money aside to pay your bills. This is a basic budgeting skill, but one which can change your financial position overnight. Many people make the mistake of spending their income on daily expenses and luxuries before considering what bills may be due. If you pay your bills first, you can reduce the stress that there may not be enough money left at the end of the month to pay them. If need be, you can cut the non-essential items you might usually buy later in the month.
2)     Track your spending. Managing and paying down debt begins with taking control of your spending. If you don't have a clear picture of what you spend, you can't manage your spending habits effectively. Write down everything you spend for a week, and sit down and consider what this exercise tells you. As an example you can check heating oil prices online without the need for an account. Understanding where you spend your money will help in  cutting down on buying things like magazines and coffees you can generate extra money to clear your bills easily.Â
3)     Always pay something off your bills. If you are really struggling, you may not be able to make the full repayments on some bills every month. Get into the habit of paying something towards every bill. This shows your creditors that you are committed to making regular payments and should prevent action against you. Paying something off will also reduce the total debt over time. At times it may feel as if you are standing still, but never let the situation get worse with outstanding bills. Some companies have budgeting options for customers for their heating oil. This allows customers to pay for their home heating oil monthly and avoid the shock of an unexpected bill for heating oil in the middle of winter.Â
4)Â Â Â Â Â Make bill payments on time. Paying late can cost you in financial penalties, and debts can escalate rapidly if this happens regularly. Some creditors may report your payment history to credit reporting agencies, and this may affect your ability to get loans and finance in the future. Be organised and know when your bills are due, so you can avoid late payments. Budgeting for your bills can also help, utility companies will allow you to pay monthly by direct debit to help manage your bills.
5)Â Â Â Â Â Set goals and track your progress. Even if clearing your debts feels like a very like journey, you should have milestones along the way. Set yourself some realistic goals so that you know how much progress you've made. Doing this will prove to yourself that you can get out of debt, and will motivate you to continue with your plan.
6)Â Â Â Â Â Cut up your credit cards. Many people get into debt simply because spending has become too easy. Rather than reaching for your credit card every time you want to buy something, think about paying cash. If you can't afford it now, save up for it. If you really can't live without your credit cards, ask that the credit limits be reduced.
7)Â Â Â Â Â Allow some money for extras. Having a budget doesn't mean cutting your spending to the point that life's a grind. Allow yourself some treats, and include an allowance for these in your monthly budget.
Reducing debt may feel impossible at times, but if you follow the advice in this article it can be achieved.
© Liffey Oil Limited www.liffeyoil.ie 2012
Publishing Rights: You may republish this article in your website, newsletter or book, on the condition that you agree to leave the article, author's signature, and all links completely intact.
Many people lose hope as their debt levels increase, and a feeling that there's no solution is common. However, there are simple steps which can turn your personal finances around, and once you recognise and take control of the situation it can be managed. Getting out of debt isn't as difficult as many people believe. The following seven steps will set you on a path to freedom from debt.
1)Â Â Â Â Â Pay your bills first. As soon as you receive your salary or other income, put the money aside to pay your bills. This is a basic budgeting skill, but one which can change your financial position overnight. Many people make the mistake of spending their income on daily expenses and luxuries before considering what bills may be due. If you pay your bills first, you can reduce the stress that there may not be enough money left at the end of the month to pay them. If need be, you can cut the non-essential items you might usually buy later in the month.
2)     Track your spending. Managing and paying down debt begins with taking control of your spending. If you don't have a clear picture of what you spend, you can't manage your spending habits effectively. Write down everything you spend for a week, and sit down and consider what this exercise tells you. As an example you can check heating oil prices online without the need for an account. Understanding where you spend your money will help in  cutting down on buying things like magazines and coffees you can generate extra money to clear your bills easily.Â
3)     Always pay something off your bills. If you are really struggling, you may not be able to make the full repayments on some bills every month. Get into the habit of paying something towards every bill. This shows your creditors that you are committed to making regular payments and should prevent action against you. Paying something off will also reduce the total debt over time. At times it may feel as if you are standing still, but never let the situation get worse with outstanding bills. Some companies have budgeting options for customers for their heating oil. This allows customers to pay for their home heating oil monthly and avoid the shock of an unexpected bill for heating oil in the middle of winter.Â
4)Â Â Â Â Â Make bill payments on time. Paying late can cost you in financial penalties, and debts can escalate rapidly if this happens regularly. Some creditors may report your payment history to credit reporting agencies, and this may affect your ability to get loans and finance in the future. Be organised and know when your bills are due, so you can avoid late payments. Budgeting for your bills can also help, utility companies will allow you to pay monthly by direct debit to help manage your bills.
5)Â Â Â Â Â Set goals and track your progress. Even if clearing your debts feels like a very like journey, you should have milestones along the way. Set yourself some realistic goals so that you know how much progress you've made. Doing this will prove to yourself that you can get out of debt, and will motivate you to continue with your plan.
6)Â Â Â Â Â Cut up your credit cards. Many people get into debt simply because spending has become too easy. Rather than reaching for your credit card every time you want to buy something, think about paying cash. If you can't afford it now, save up for it. If you really can't live without your credit cards, ask that the credit limits be reduced.
7)Â Â Â Â Â Allow some money for extras. Having a budget doesn't mean cutting your spending to the point that life's a grind. Allow yourself some treats, and include an allowance for these in your monthly budget.
Reducing debt may feel impossible at times, but if you follow the advice in this article it can be achieved.
© Liffey Oil Limited www.liffeyoil.ie 2012
Publishing Rights: You may republish this article in your website, newsletter or book, on the condition that you agree to leave the article, author's signature, and all links completely intact.
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