Getting out of credit card debt is not an easy task, but it’s not impossible, and there is hope if you are feeling overwhelmed.
Being in denial of your credit card debt and choosing to ignore it will never make it go away. Chances are you’re already feeling bad about it, and it has added stress to your life. Debt will always be there unless you tackle it.
1. Create a realistic budget and stick to it
Developing a budget that tracks your income and your expenses is crucial to getting out of debt in a short period of time. It will help you gauge where you are with your finances so that you can move forward toward your goal.
Creating a budget will expose whether you have money left over, which is called a surplus, or if you are in the negative, which is called a deficit. The goal is to increase your surplus and use that money to pay down your debt and MoneyCoach can help you stay updated with your expenses, showing the exact percentage of the money you have spent and how much you have left.
2. Establish a starter emergency fund
You might be wondering, “Why is having an emergency fund important?”. Well, if you don’t have any money in the bank and an emergency does happen, how are you going to pay for it? For most people, credit cards become the funding source for those emergencies. If you are trying to get out of debt then you need to put a buffer between you and debt; that is exactly what an emergency fund does. Create an account on MoneyCoach with the amount of money you would need as an emergency fund and use it only in times of crisis.
3. Throw any excess cash at your debt
When we were getting out of debt, there were several times where extra money fell in our laps that we had not factored into our debt elimination originally. We decided to take this cash and use it to tackle our debt. The more cash you can put towards your debt, the faster it will disappear. Using MoneyCoach, you can transfer all the extra money from your monthly account to your debt, preventing the waste of money on useless things.
4. Change your financial thinking
You might not think so, but changing the way you think about money is also probably the best way to get out of credit card debt. After budgeting and prioritizing and getting your credit card debt under control, the way you think about your finances will have an impact on your future financial health. With the advanced reports of MoneyCoach ( monthly comparison of incomes and expenses, a graphical display of the account balance, a chart of the living expenses etc ), you can understand better your spending habits and keep them under control.
Debt doesn’t have to be forever. Develop your financial game plan and start your journey toward being debt-free today.