What to Do If You’re Drowning in Debt but You Want to Invest
When your finances seem to be headed down a wrong path and your debt is getting out of control, be wise and take stock of the direction you are going in. There are steps you can take to prevent you from getting into further debt, and to help you eliminate some of what you are currently dealing with. Use these tips to help you begin moving in the right direction financially. Remember this is a temporary situation in which you have more control than you think. The number one take away is this, know your numbers then take the steps to improve your situation.
Put Your Credit Card in a Drawer at Home
If you have a difficult time saying no to purchases, take your credit card out of your wallet and put it into a safe place at home. Make a decision that you will leave it there and will only take it out when absolutely necessary. This alone will help force you to be more cautious in your spending.
Cancel Any Retail Credit Cards (know your credit situation first)
Retails credit cards typically have high interest rates. It is also difficult to keep from spending when you feel like you have several options as to where the money will come from. Get rid of these cards and keep only one main credit card, which is hopefully the one you have taken from your wallet and placed in a safe place at home. Be careful and aware of the potential implications on your credit score. Your credit to debt ratio is also important. But that is another post.
Pay Back Your Debt as Quickly as Possible
If you have a balance on any credit card, be sure to pay at least the minimum monthly amount each month. Do your best to pay back your debt, and as quickly as you can manage. By paying off your debt, you will eliminate some of the interest that continues to build as time passes.
Consider a Second Job or Start a Business
If you can work even an extra day per week, it can help you pay back your debt sooner. At the very least, it may give you that extra wiggle room so that you do not get yourself further into debt. If you a considering starting a business, this may be another route in which you will be able to get rid of debt quicker. It will take up some of your free time, but will be worth the sacrifice in the long run. If you are interested in starting a business but do not know where to start, check out Financial Confidence Now Academy. The tools you need to get your finances in order and build your business in a cost effective manner can be found there.
Creatively Find as Many Ways to Save as Possible
Look for every way possible to save money. Whether that is by clipping coupons or shopping only during sales, make it work. Find other ways to save in other areas, such as your electricity bill. Be vigilant about turning lights off when you leave the room, and about unplugging appliances that are not in use, since they continue to drain energy when plugged in.
Take a bagged lunch to work instead of buying fast food. Make a coffee at home before you leave for work instead of stopping at the drive-thru on the way there. Stop spending on unnecessary purchases in order to save on items you don’t really need anyhow.
Learning to be frugal takes a little bit of preparation, but gets easier as time goes on. [ctt template=”12″ link=”27OH5″ via=”no” ]It might seem like a chore at first, but the benefits are numerous.[/ctt]