Being buried in debt and bills affects every aspect of your life. As countless unfortunates have come to know for themselves, getting into debt is easy, and getting out of debt is hard. But getting your bills under control is possible—and you can get started right now.
Reigning in Your Bills
If you're ready to take back the financial reins in your life, here are some basic steps to help you get started:
- Take stock. First, you have to know what your bills are and when they are due. Organizing your bills can be as simple as listing them on a computer document or on a bulletin board in your house. Write down your monthly bills in order of their due dates, and list the monthly amounts you must pay for those bills: “1st of each month – Rent - $1,100. 5th of each month – Visa card - $50,” etc.
- Be honest. Next, it's time to take a brutally honest look at your bills and whether you can really afford some of them. For instance, if you're paying $170 a month for the highest cable package when you could get by perfectly well with a more basic $50 plan, then guess what? It's time to call your cable company and drop down that package. Congratulations—you just saved $120 per month.
- Budget your money. As you're still looking at that wall of bills, it's time to examine your monthly income in relation to them. If you get paid $2,000 every two weeks and the bills that are due between the 1st and 15th of each month add up to $1,500, that only leaves you $500 for other necessities, like food and gas, and extra luxuries during that time period. What's that you say? You'll just buy things with your credit card when the $500 runs out? Wrong answer, sailor. That kind of thinking is what got you drowning in debt in the first place. If $500 is all you have to spend, then $500 is all you should spend. Time to get rid of some of that unnecessary spending you've been doing (ahem, twice-daily trips to Starbucks and those frequent nights out to high-class restaurants with your girlfriends).
- Pay down your debts. If you have a bad habit of charging up credit cards, now is the time to hit the brakes. Whenever possible, pay more than just the minimum amount due when you make your monthly credit card payments and start paying more to principal. You might also consider offloading some valuables to get cash in hand and pay down your high-balance credit cards even faster.