How to Get Out of Debt While on a Budget

If you have a lot of debt and not much money, you might despair of ever getting out of it, especially if you currently only barely break even. If you don’t have anything extra to put toward your current debt, you might need to bring in more income or cut expenses significantly. By focusing your efforts and strategizing, you can slowly make your financial life more flexible to begin to pay it off.

Take Care of High-Interest Debt First
If you have credit card or other high interest debt, now is the time to take care of it. The interest you are paying will reduce your ability to pay off the rest of it. You could look into debt consolidation if you don’t have enough funds to pay off the highest interest yet. That means you take out a private loan to pay off one or more debts, and the new loan often comes with a lower interest rate. There are special loans designed for the process, but many standard loans can also be used for the process. No matter which method you choose, it is a great way to get out of high interest debt starting now.

Sticking to Your Budget
If you have a budget, you can add a bit more structure to your financial life since it helps you eliminate excess spending. Of course, you will also need to follow the rules you have set for yourself to see any progress. To make a budget, you will want to look at all your previous expenses and determine how much you typically spend in each category. You might try to cut back on things you don’t use any longer.

Get More Income
You can also choose to bring in extra income if you find your budget is not giving you enough room. You might try selling things you don’t need anymore. Or you could rent out extra rooms in your home and look for part-time work that can be done online. You might look for a job that can be done on the weekends, such as freelance writing or driving for a ride-sharing company. Determine how much more you need to bring in each month, and then try to find that amount of work.

Consider Credit Counseling
There are many ways you can create a strategy for paying off debt. If you turn to financial experts, you can often find the best way of budgeting and determine the right way to negotiate with your creditors. These experts can also give you direction on applying for economic hardship programs so you can reduce bills. You might turn to a credit counseling agency since they have initial consultations for those who need help with monthly bill reduction or budgeting. They offer a neutral view of your situation and will look over your whole situation when deciding on the best option.