How to Relieve Your Debt

Too much debt creates a financial burden, and sometimes debt can lead to physical problems such as stress, headaches and insomnia. Although excessive debt is a serious problem that can lower credit scores and result in the inability to obtain credit, there are steps you can take to relieve or get rid of your debt. Stick with a debt elimination plan and you can reverse your situation.

Instructions

1

Compile debts. Open your credit card statements and other bills and calculate how much you owe. Knowing your total is essential to outlining a realistic debt elimination strategy and estimating a pay-off date.

2

Determine how much you can afford to pay each month. Quickly relieving debt calls for cutting out extra spending and putting all your disposable funds towards your debt. Take your monthly expenses (transportation, housing, utilities, food and insurances) and subtract this number from your take-home income.

3

Spend money only on necessities. Overindulgence can impede your efforts to relieve debt. Assess your spending habits and resolve to cut back on or completely eliminate extras such as shopping, dining out, vacations and hair appointments. Be wise and use this money to pay off debts.

4

Adopt a cash-only attitude. Applying for new lines of credit or regularly using credit cards contributes to your debt load. Learn how to pay for items with cash. If you must charge an item to your credit card, pay off the balance each month.

5

Find ways to earn extra money. Inadequate income can play a role in debt. Rather than use credit cards to compensate for a small income, downsize by choosing a cheaper residence or selling your car to live within your means. Consider other employment options or start a side business to generate additional cash.

6

Shop around for a new credit card. Higher interest rates on credit cards can slow down your efforts to pay down debts (most of the payment goes towards paying the incurred interest). Ask your creditors to reduce your interest rate, or apply for a low-rate credit card and transfer your existing balances.

7

Increase your monthly payments. Paying only the minimum on credit cards will not reduce your debt. Pay a small lump sum every month until the balance is paid--perhaps $100 or more. If this is unfeasible, double or triple your payments.