DIY Plan: Ingenious ways to manage your credit card debt to attain financial freedom
In this tough economic situation, the livelihood of common man has become miserable. After the recent financial collapse, a large number of people suffered job loss or wage deduction. The condition of the economy is not strong enough to bring over a complete revival of the job market. So, many people are still unemployment. In this scenario, most of them failed to pay of their credit card bills on time and incurred overwhelming debt. If you’re in a similar situation, then you can come out of the debt rut by managing your credit card debt. You’re not required any help from the professionals to come out of this financial maze as you can do it on your own by following some of the simple steps.
Here are some of the important points that you need to consider when you plan to pay off your credit card debts on your own:
Step 1.
Budgeting- A key mantra: It’s needless to say that if you’re planning to manage your credit card debt, you need to start with a budget plan. Well, budgeting is considered to be a key tool to get out of the debt rut. When you’re on a budget plan, it can be easier for you to track your expenses. You can understand where you’re draining your hard earned money. You can avoid splurging when you’re on a budget plan. As a result, you can manage to save considerable amount of money when you’re on a budget plan. Make sure you modify the plan in accordance with the financial situation.
Step 2.
List of the owed amount: Once you formulate a pragmatic budget plan, your next job is to review your financial state. You’re required to prepare a list of the owed amount in descending order of the interest rate. Preparing a list of the owed amount can make it easier for you to pay off the debt.
Step 3.
Approach the creditors for negotiation: You can negotiate with the creditors to lower the interest rate on the principal balance to make the owed amount affordable to pay off. If the creditors don’t agree to negotiate, then you can threaten them to file bankruptcy. In most of the cases, this trick works and you can manage to lower the interest rate on the outstanding amount. Once your interest rate is reduced, you can actually manage to lower your monthly payment.
Step. 4
Avalanche method of payment on the debts: Make sure you prepare a list of the owed amount in descending order of the interest rate. Start paying the high interest debt on top of the chart. Make more payment on the high interest debts, in the meantime make payment on the remaining balance. Once you pay off the high interest debt, start working on next on the list. Try to continue the process diligently unless you pay off the debts in full.
Step 5.
Avoid the use of the plastic: When you’re working on paying off your debts, try to avoid the use of cards. In most of the cases, you find the consumers are tempted to spend when they find teaser offers on the card. Therefore, keep aside your card and spend cash. When you use cash instead of cards then it can be easier for you to stay within your means.
Step 6.
Increase your income: Look for a part time job to make more money during your spare time. You can work as a freelancer or start your own home based business to make some extra cash. You can use the extra money to pay off your debt and regain financial freedom during tough economic situation.
Therefore, you’re required to keep the above mentioned points in mind when you plan to manage your credit card debt on your own. Once you pay off your debts yu can regain control over your financial situation.
