When you’re in the initial stages of figuring out how to wipe out debt, one of the first steps that you’ll need to do is sort out debt. And while this may seem like a simple enough process, sometimes it’s difficult to figure out where to start. Today, we’re going to talk about how to begin that process and then the steps that you might want to consider taking next.
Going overboard with your finances is not hard to accomplish.
Experts have said that the average American family owes $7,500 in credit card debt alone. If that were not enough, many people now owe more than their home is even worth. But alas, all is not lost. A budget can be implemented at any time, so pull up a chair, gather your bills and let’s get started.
How to Sort Out Your Debt
The first thing is to figure out what you have to pay and what you have coming in. Once you have sorted through the bills, organize them into groups of what has to be paid such as the utilities, mortgage, rent, loans and credit cards.
If you cannot afford the electric or fuel bill, call the companies.
Most of the companies now offer a monthly budget plan in which you would only be required to pay around half of the bill, and then they will bill you the balance over the next few months.
In regards to credit cards, you can pay the minimum until you get through the first month. Then move on to the weekly expenses such as food and gas.
If you have really stretched the family budget to the limit (as many of us do), then you will have to forego the extras for a month or two. Bring your lunch to work, have your coffee at home and stay in at night.
Recovering will not take that long since there is a lot of money to be saved daily just by doing the few items above.
When it comes to food shopping, make a list that includes planned out meals for the week. You will be surprised how much it will save you when you stick to the list and plan your meals. Use coupons to further your savings and save some extra money.
Consider making a few casseroles each week as they can easily make two meals for you and your family.
At home, lower the temperature on the furnace, both when not at home and before going to bed. If you have not already replaced the old light bulbs with the new energy efficient bulbs, do so – they are a real money saver.
Turn off appliances when not in use or unplug them to really see your utility bills decrease.
Examine all parts of your financial life and figure out where else you’re spending money. If it’s towards bills, student loans, auto loans, mortgage, etc. That counts towards your overall debt. And once you sort out debt, you’ll have a place to start with getting out of debt and staying out of debt.