How To Get Out Of Debt

If you have found yourself in a position where you are in serious debt and cannot think of a way out of the situation, then take a few minutes to read these few tips. Some may seem obvious but do put them into practise as they will help.

I am assuming that you are in a situation whereby your income for example; is £2,500 per month and your expenditure is £3,500. This is not a good position to find oneself in. A better position would be if you were earning £2,500 per month and your expenditure was only £1,800!!

It is so easy to despair when you encounter your first financial crisis. You're not alone. Many people face a financial crisis some time in their lives. Whether the crisis is caused by personal or family illness, the loss of a job, or overspending, it can seem overwhelming. But often, it can be overcome. The important thing to bear in mind is, not to panic!

We have all done it. We have all succumbed to the temptation of freely available credit. We have all signed on the dotted line for items based purely on self- gratification only to regret the decision at a later date. Of course, once it starts it tends to spiral out of control and you then find yourself in this current predicament.

The first thing you have to do is take stock of your debt. At this point you should be very realistic with yourself and itemise every expense no matter how trivial it may seem. Most people fail at this hurdle because they lie to themselves about the expenditure. They conveniently forget about certain items, make excuses about other bills or blame the problem onto someone else. Anything in fact, except facing up to the reality check. I must stress again, that in order to stop the downward spiral of debt you must be brutal in your approach. If you really cannot face the breakdown of your expenses then get someone you know to help you.

The most obvious first step is to prepare a budget and although it may not be everyone's idea of fun it is nevertheless necessary if you are to take the first step towards overcoming your financial situation. Have you seriously considered preparing a budget? Not just a mental note but a written exercise taking a long, cold, hard and truthful look at your predicament.

It may sound a very obvious statement to make but the first step toward taking control of your financial situation, is to do a realistic assessment of how much money you earn and how much money you spend. The operative word here being "realistic." It may not be pleasant to be so forthright about your own circumstances but if you choose to ignore certain aspects then you are just deceiving yourself and the whole exercise would become a complete waste of your time.

Consider these questions:

How many credit cards or debit cards do you have? Try to reduce the number of credit cards you hold and set yourself a monthly expenditure budget. Do not exceed the amount you selected. Rather than have multiple credit cards shop around for the one offering the best rates and transfer over to that card. The less credit cards or debit cards you have the less the temptation to overspend.

How many times a week do you go out?

Do you really need to go out clubbing every night of the week? Why not reduce the number of nights out from seven to two or three. You may be pleasantly surprised to discover that you can live quite well without going out every night.

How much do you spend on cigarettes and drink?

Calculate how much per week you spend on cigarettes and drink? Quite surprising, isn't it?Why not try to cut down on the amount you smoke and drink not only for the sake of your finances but more importantly for the sake of your health.

Do you really need more clothes?

This is a difficult question to answer as we all have different views on style, clothing and fashion. Nevertheless, you need to assess your own circumstances and decide whether that particular item of clothing is absolutely necessary or not. In most cases you will find that it is not as critical as you first thought.

Will the car not last another year?

Why change the car now. Will it not last for another year? If you must have a new car this year, does it have to be the top of the range model? You will be pleasantly surprised at how much you can save by not having a few of the latest gadgets added.

The weekly shop:

Ask yourself, do I really need two shopping trolleys worth of food every week?We are all obsessed by our weight and yet we all walk out of the supermarket laden to excess and then wonder why we are putting on weight. This in turn means that you will spend more money on fancy diets, get more depressed and end up eating more food! Try to buy less and buy fresh.

There is no magic wand as far as recovering from debt is concerned. It takes time, it can be a struggle but it will be worth it in the end. Hope that this has helped.

You may freely reprint this article provided the author's biography remains intact.

John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

More Resources

Unable to open RSS Feed $XMLfilename with error HTTP ERROR: 404, exiting

More Debt Relief Information:

Related Articles


Debt and Financial Optimism in the UK Continue
With £1.3 trillion pounds worth of debt in the UK, Scotland's Citizens Advice Bureau has welcomed a new Bill to regulate lenders and protect borrowers from creating un-repayable levels of personal debt.
Is Independence Overrated?
Happy Independence Day from The Money Motivator!If you don't celebrate "The 4th of July" like we do in the United States, today still presents you with an awesome opportunity to examine your independence.Independence means the quality or state of being dependent.
Selecting A Credit Counselor; Asking The Right Questions.
When you find yourself thinking about using a credit counseling service, you need to be verycareful. You need someone who will help you, not just some pushy sales associate who wantsonly to sign you up for their service.
The Five Most Popular Questions About Bankruptcy
WILL MY CREDITORS STOP HARASSING ME?Yes, they will! By law, all actions against a debtor must ceaseonce bankruptcy documents are filed. Creditors cannot initiateor continue any lawsuits, wage garnishees, or even telephone callsdemanding payments.
Debt Elimination 2
The First Step To Debt EliminationRegardless of your personal and financial circumstances, your education and your background, the chances are the first step you need to take in debt elimination has to take place in your mind. The Western mindset, especially in the US and UK, is firmly fixed on consumer debt.
What is Bankruptcy?
Personal bankruptcy is a legal way to give people with overwhelming debt a fresh financial start. However, it is important to realize that certain forms of debt, such as student loans, are not forgiven through the bankruptcy process.
Dont Let The Good Times Bury You
It is vital to get rid of debt while things aregoing well. Yet the opposite is usually thecase.
Debt Getting You Down? - Make a List!
Debt is not much fun and when faced with it, people sometimes look for complicated debt solutions and often overlook the many simple ways that you can save money. Believe it or not, one of the simplest and most effective debt solutions is to get hold of a pen and a piece of paper and make a list.
Life After Bankruptcy
Bankruptcy and Credit - What Happens After Your Debts Are Discharged?Bankruptcy will remain on your credit report for ten years. But you may be able to get credit fairly quickly - almost immediately after a bankruptcy - although you will pay dearly for it.
Student Loans Can't Be Swept Away Through Bankruptcy
Bankruptcy is in the news these days, as Congress has finally overhauled the Federal bankruptcy law after years of talking about it. The credit card companies, rightly or wrongly, have been pressuring members of Congress to tighten the bankruptcy statutes, saying that too many people were willfully spending money they couldn't repay with the intention of avoiding paying the money back by filing for bankruptcy.
Help for the Single Mother with Managing Credit and Debt
Today's consumers benefit drastically from the usefulness of credit. Credit cards are especially useful for large purchases, emergency situations, making reservations, identification, and protection from fraud.
Bankruptcy - Is It The Right Choice For You?
Bankruptcy is one of the tougher choices we as adults face in today's society where it is the norm to be in debt, albeit some more so than others. Credit card offers materialize whether you are looking for credit or not.
Debt Help and Advice for the UK
At some time or another during our lives most of us will overspend and get into debt. Sometimes we can get our finances back on an even keel by cutting down on a few luxuries.
How To Pay Credit Card Debt Off
If you are determined to pay credit card debt off you are making the best financial decision of your life. The reason credit card debt is so bad is because it carries such a high interest rate.
How to Choose a Debt Settlement Company
As consumer debt continues to spiral out of control, debt relief is fast becoming a major concern for many American's. In 1999, American's made $1.
British Families and Debt
There is current concern from the Bank of England that British families are getting deeper into debt, however, it has been said that lenders are putting themselves at risk because people are now more willing to make themselves bankrupt.Despite people already having significant amounts of debt, credit card companies are still prepared to lend these people money.
You Can Make Financial Resolutions Anytime
The New Year often brings with it a desire to right the wrongs in yourlife. From this desire springs the tradition of New Year resolutions.
Reduce Your Debt
Do you want to reduce your debt? Having trouble paying your bills? Getting dunning notices from creditors? Are your accounts being turned over to debt collectors? Are you worried about losing your home or your car?You're not alone. Many people face a financial crisis some time in their lives.
Credit Card Debt Freedom is Possible
Credit card debt have you drowning financially? You're not alone. The average American household carries $9,205 in credit card debt, according to CardWeb, an online industry tracker.
Personal Debt Reduction Practices
Personal debt reduction practices, the steps people take to relieve the debt in their lives and to become more financially free, are a hot topic among financial circles. American spending habits are producing more people who are deeper in debt rather than people trying to achieve financial freedom.