Faced with thousands of dollars in credit card debt or student loans, many American consumers are wondering how they are going to pay off the debt they have accumulated over the past years or months. If you find yourself in this situation, rest assured that you’re not alone. Millions of Americans are struggling with credit card debt and other types of debt, and many are finding it difficult to overcome this situation and finally achieve financial freedom in the face of the United States’ current economic situation. By following these six steps to get yourself out of debt, you can work towards paying off your student loans, car loan, or credit card debt, and learn more about effectively managing your finances in the process.
- Make a goal and deadline for yourself. While a couple hundred dollars in debt may not seem like much, charging small amounts to your credit card and accumulating interest over the course of months or years can come back to haunt you in the form of significant debt. If you are worried that you may not be able to pay off your credit card, student loan, or another type of debt, your best bet is to make a reasonable goal and give yourself a deadline to reach it. If paying off your total balance by a certain date seems a little too ambitious, set smaller month-to-month goals that can help you reach your ultimate goal by the deadline you set.
- Be realistic. The fastest way to sabotage your own debt-free goals is to set unrealistic expectations for yourself that you’ll never be able to achieve. Plus, feeling disappointed about a goal that you didn’t reach is likely to make you less productive in your pursuit of debt relief. For example, if you think you can afford to pay $400 toward your debt every month, then set your goal at $300 and try to overshoot it every month. This will remain a challenge, but will also help you stay positive and optimistic, even if you are only chipping away small chunks of your debt each month.
- Surround yourself with people who share your financial goals. We may not always realize it, but we are all influenced by the people we spend time with. You can use this knowledge to your advantage by surrounding yourself with people who share similar financial goals with you, and also by rearranging how you spend time with your current friends to match your goals; i.e. planning activities other than going to the mall with your friend who loves to shop. This will inspire you to stick with your goals and can help you learn new tricks in taking control of your money.
- Understand your interest rates. Many people with multiple sources of debt don’t understand how their interest rates work and how they can more easily pay off their debt by tackling the highest one first. Identify the account (student loan, mortgage, car loan, credit card) that has the highest interest rate and work towards paying that balance down by dedicating any extra money towards that account each month, while still making at least the minimum payments on the rest of your accounts.
- Track your spending. By tracking your spending, you can identify what types of unnecessary purchases you make each day, week, month or year that can be eliminated – like going out to lunch and buying that daily Starbucks coffee instead of bringing lunch and coffee from home. You can use a budget spreadsheet to put all this information on paper and determine how you can reorganize your spending to save money each month.
- Contact an Oklahoma bankruptcy attorney. If you’ve tried everything you can think of to pay down your loans and you are still facing unpayable debt, you should consider speaking to an experienced bankruptcy attorney in Oklahoma. Despite the fact that bankruptcy typically carries a negative stigma, it is actually a very good option for many people looking to eliminate their debt and start fresh. Contact our skilled bankruptcy attorneys at Oklahoma Legal Center today if you are considering filing for bankruptcy in Oklahoma, and we can help you determine your best course of action.