Few things can feel more deflating and debilitating than being buried beneath a mound of debt. Finding yourself in the red can leave you wondering how and if you’ll ever get back into the black again. After all, any money you make has to go right into paying off those old debts, which makes it hard to save, which can leave you so strapped for cash that you have to borrow again, thereby perpetuating the vicious cycle. You can’t stay in debt for the rest of your life, and you can’t keep making the same mistakes that trap you in the red.
So what can you do to get out of debt?
Find a Way to Stop the Bleeding
First things first; to get out of the “red,” you need to “stop the bleeding.” Cut spending. Cover basic needs and cut down on anything and everything else. Do whatever you need to stop yourself from going even further into debt.
The deeper you dig your hole, the more daunting getting back out again will seem, and that frame of mind can all too easily leave you trapped in debt.
Analyze Your Finances
Once you’ve stopped going downward into debt, it’s time to chart your course back up. That begins with analyzing your finances and determining where you can do better. Find places where you can cut expenses, make more money, or both. Financial planners can be an invaluable resource in helping you do just that.
Start the Momentum
Paying off debt is, in part, a matter of momentum. It won’t happen all at once but in increments. You want to establish forward momentum towards your goal. However slow and small that momentum may be, remember that any progress is still progress.
Consult Your Creditors
Remember that your creditors want their debts repaid. They probably won’t say no to helping you look over your finances if it helps them get the money they want. Swallow your pride and consult with your creditors about the nature of your debts and the best ways that they can be repaid.
Don’t let debt define and subsume you. Draw up a plan and work your way out of debt one payment at a time.