carrying debt

This post is provided by APB Pole Barns. APB offers a large selection of pole barn kits and provides designs, plans, and building packages for post frame structures.

Getting into debt is always easier (and generally more fun) than digging your way out of it.  You sure loved those little ankle boots when you bought them on credit (only $100 on sale!) but now that they’ve been sitting in your closet for three months, you’re beginning to wonder if they’re really worth the exorbitant amount of money you’ll end up paying in interest for them (you suddenly realize that they’ve cost you almost double what you thought…ouch).

Or maybe the home renovation seemed like a brilliant plan a few years ago when the housing market was at its peak, but the crash and your subsequent inability to sell for anything even resembling your expenditures has left you with a mortgage AND a home equity line to pay off (and you’re starting to fall behind).

Whatever plans you made (or didn’t make) in regard to your financial solvency, if you find yourself in debt, you should know that your situation is not hopeless.  There is a way out and you can begin taking steps that will have things looking brighter before the end of summer.

1.      Cut up the credit cards. Overspending (in one form or another) is what got you into this mess, and the best way to stop hemorrhaging money you don’t have is to nix the plastic.  You may want to keep the card with the lowest interest rate for emergency purposes, but keep it locked away and DO NOT put it in your wallet.  The idea is to resist temptation.

2.     Consolidate. If you’re experiencing financial woes, this is a good way to get back on track and simplify your payments (without filing for bankruptcy).  You may be able to eliminate some of your debt, you will certainly pay a lower interest rate, and you will most likely be able to pay off a debt consolidation loan faster than a credit card.  You can also try to make higher payments than the monthly minimum to reduce the principle (cutting what you pay on interest) as well as begin rebuilding your credit rating.

3.     Refinance. Now is a difficult time to refinance, but if you can swing it with your housing lender, you will be able to take advantage of extremely low interest rates (probably much better than when you bought your house).  You will also cut your monthly mortgage and you may be able to pay off your home loan sooner than expected.

4.     Budget. Formulating a budget sounds like it should be easy (don’t spend more than you make!) but most people who find themselves in debt suffer from money management problems.  For that reason, it might really pay to meet with a financial planner to help you set up your budget.  They can offer sound advice and make a plan that works for you.

5.     Pay yourself. Even kids get an allowance, and if you don’t give yourself at least a little spending cash, you’re going to start feeling deprived and frustrated (which is when you go overboard).  So set aside a little bit for yourself each week ($20, $50, whatever you can) to get coffee or go see a movie.  Sometimes the little things in life can make all the difference, and even though you’re trying to reduce your debt, you will have a better chance of staying on track if you allow yourself some mad money.  Spend a little, save a lot.

Image Source: http://swingingkatz.hubpages.com/hub/get-out-of-debt

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