How to Pay Off Bills and Credit Card Debt

A large amount of debt and overdue bills can be overwhelming, especially if you are struggling to make minimum payments each month. However it is possible to pay off your bills and your credit card debt. It is essential to create a plan that will pay off your debts and follow a budget if you want to succeed. The budget will help you find extra money and track your expenses. The only way to stop the debt cycle is to be in control of your money.

Instructions

1

List all of your credit cards and unpaid bills, the total amount you owe and the minimum monthly payment on a piece of paper. Order the list from the smallest amount you owe to the largest amount you owe.

2

Create a budget by listing your income and your expenses. This should include things such as your house payment, monthly utility bills, your minimum monthly credit card payments and entertainment categories such as eating out, shopping and fun money. Track your money by writing down every purchase for a month to see where you are spending your money. This will give you a good picture of which areas you can cut. Then make the adjustments and cuts necessary to find more money to put toward paying your bills each month. Your expenses need to be less than your income to make this work. If they are not, you need cut your expenses. Begin by cutting things in your fun categories.

3

Find extra money in your budget to put toward your unpaid bills and credit card debt. The more money you find the more quickly you will pay off your debt. Making sacrifices now will benefit you in the future. Consider canceling your gym membership and cable TV and lowering your cell phone plan to find the extra money. Groceries and eating out can usually be cut.

4

Put all of the extra money toward your smallest debt until it is paid off, while continuing to make minimum monthly payments on your other debt. Move on to the next debt on your list and add the money you were paying on the first debt to the minimum you were paying on it. Continue doing this until your debts are completely paid off.