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Debt is one of those things that people do not generally like to talk about. One of those things ranked right up there with adultery and teen pregnancy. It is so rampant and yet so frowned upon that those who find themselves in debt often feel like they have failed greatly somehow and they tend to just get deeper into it to keep up appearances. Nobody wants to admit they are having financial problems. There is hope however, debt does not have to make you give up. You can shake your self off with these six steps:

  1. Stop Borrowing

Sounds kind of obvious doesn’t it? It actually but when one is in debt they can sometimes become so addicted to it that they somehow feel they cannot live without it. It becomes the only way they can deal with their finances. The first step to freeing yourself from debt is not borrowing. It could actually be the hardest thing to do and the reason that people are still in debt. The steps that follow will help unravel this step a little further. To solve a problem, you must first find a way to stop doing the thing causing the problem no matter how hard it may seem.

2. List Down Your Debts

This can be a very hard step. However, you need to come to terms with how much damage has been done in order to come up with a working solution. Once you have come up with a list, you should then proceed to rank them. I would recommend ranking them in order of urgency. Normally late payments attract a penalty in the form of additional interest and that is the last thing we need at this point, it would therefore be prudent to list the debts from those that are past due to those that are a due further into the future.

3. Start Analyzing Your Spending

There are times most of us take our spending for granted. Whether in debt or not it is not a bad idea to take a close look at our spending patterns. When one is in debt, it is very easy to imagine they cannot get out of it because they are spending on essential things. There just does not seem to be a way to service your existing debts and to stop borrowing. It is therefore important for you to track your spending. It is the little things that change. You might find that you buy lunch and carrying it from home would save you a coin, or maybe is you woke up an hour earlier you could save on cab fare and walk instead. Analyzing your spending can help you save a few coins to help you get out of debt faster.

4. Make a Budget

So since you have stopped borrowing, have been able to save, you have also analysed your spending and realized what is important and what you can do without, it is time to make a budget. You will need to start at point two again for this but this time you will be writing down your incomes but even if you have only one, just write down that one value. After that you will need to list all your IMPORTANT expenses, I capitalized important for a reason; only list expenses you MUST incur. A night out in town and a hundred beers, should not be on your list you should start to minimize your entertainment expenses. After you have deducted your expenses from your income, you should then follow the 50/20/30 guideline. Make sure to also put something aside for emergencies as well. You will need to be very disciplined for this step.

5. Start Paying Your Debts

Now that you have a budget and you have hopefully started saving some coins that were previously slipping through the cracks, it is time to start paying the piper. It is time to go to that list you had made and start paying what you owe. Follow your list to the latter and you will begin to lessen the load on your shoulder and hopefully on your mind as well. If you can pay debts not due also, it could go a long way in fast tracking the process.

6. Find Something To Supplement Your Income

This might not be necessary but it will definitely help to ease the pressure on your finances. Think about that hobby of yours you enjoy and try to find out if there is any way you can monetize it. With the internet people get paid for things they would never have imagined could make them money. Try doing some research you never know, you just might pay off your debts even faster than you anticipated but do not let this put any pressure on you. If you work on points 1 to 5 diligently you will still get there.

Bonus Point

Here at It’s Never That Serious, we always want to ensure you do not get overwhelmed. While dealing with your debt, do not lock yourself away and feel sorry for yourself because of the situation you find yourself in. Your mind is your most important asset, everything we achieve we achieve in our minds first so believe first that you can beat your debt problem and you will already have started the journey, believe you can be disciplined and you will be. You should also find out more, there could be more options, read and talk to your friends who have you know have some knowledge of debt management. It is going to be alright.

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