When you’re in debt and broke, the seemingly only thing left to do is to file for bankruptcy. Although it can help you get out of debt when you’re broke, may also affect your credit score. Even if you get back on your feet, the bankruptcy will have ruined your credit standing. It will keep coming back to haunt you.
“What can be added to the happiness of a man who is in health, out of debt, and has a clear conscience?”
Want to Get out of Debt? Here’s How:
Thankfully, there are ways to get out of debt without having to file for bankruptcy even if you’re broke. Read on.
Talk to your creditors
One of the biggest mistakes that people make when they are in debt dodging their creditors. They do so as much as they can for the simple reason that they don’t have the money to pay their debt.
What many don’t realize is that many creditors are more than willing to make adjustments on your outstanding debt to make it more affordable. This is especially so if you went through a major financial crisis. For instance, an emergency in the family or being laid off from work.
Check your credit card statement
Looking at your credit card statement can be quite dreadful. However, taking a look at it will help you see the actual charges, like annual fees, for which you can request a waiver.
Also, it will help you determine the minimum amount you can pay to avoid incurring additional charges. Just ensure that you’re not late on your payments. Else, you will incur charges that will further prevent you to get out of debt.
Review your expenses previous month’s expenses
Take a close and careful look at every single thing you spent on during the previous month. This will help you see where your money is going. You will also be able to evaluaate which expenses you can cut back on to pay off your bills first.
Prioritize the essentials
When you’ve got a very tight budget to work on, focus on the most essential bills. That includes your home, car, groceries, and utilities. These are usually the basic and important things you need to live on a day to day basis, but also contribute to a huge chunk of your expenses.
Don’t forget to save
Many people would say that it’s forgivable if you don’t stash a few dollars while you’re trying to get out of debt. But here’s the thing. If you can’t start saving now, when will you be able to start? The amount doesn’t have to be a lot. Ten bucks a month is a good start!
Track as you go
The best way on how to start becoming debt free is keeping an eye on your money as you spend it. The more you keep an eye on your money, the more you’ll become vigilant with your spending habits.
There are a lot of budgeting apps that you can download for free to help you get out of debt and stay out of it.