How Can I get Out of a Cycle of Debt?
Once we get into a cycle of debt, then it may seem hard to get out of it. It could be that you are using a payday loan to repay a payday loan, go overdrawn at the end of every month or need to borrow money to cover you loan repayments. It is easy to get into a situation where it feels like there is no solution. There always is a way out though.
Seek professional advice
It can be wise to try to get some debt counselling. There are free debt counselling services and if you look online you should be able to find out how to contact one of these companies. They will be able to help you with anonymous advice to help you to get out of your problem. It may be that you are not happy talking to someone though and so you may rather try to sort out the problem yourself.
Look for ways to earn more
To start with it can be a good idea to see whether you can increase your oncome. This may not mean with regards to your specific job or to get job, although these are the more obvious solutions. Try to get more hours in your job, find a better paid job or try to get a pay rise. These seem simple but they are not always possible. You may also consider getting a second job, but again this can be tricky for some people.
There are other ways that you can earn more money though. You might be able to sell some things that you own, perhaps through a social media site, online auction site or car boot sale and this could raise some cash that could help you out. Even if it is just a small amount it can all add up, but just make sure that there selling fees are not dearer than the item(s) that you are selling.
You could consider doing some online work to earn money. There are all sorts of things that you can do from surveys to freelance work. Make sure that you read reviews of different sites so that you are sure that the method you have found is genuine and that you will get paid when you have completed the task. You should be able to find some money making forums, blogs and websites which have information about how to earn money online which will help you.
This is another area which can be tricky. You may feel that you are already spending as little as possible, but there may be ways that you can cut down even more.
It can be wise to split everything you spend into necessary and luxury. So, your utility bills, contracts, rent, loan repayments, food and transport to work would count as necessary items. Luxury items would be things like gifts, eating out, new gadgets, jewellery and accessories, holidays and things like that. You might be surprised how many things you buy would be considered to be luxuries.
Once you have done this, the first thing to do is to see whether you can reduce the cost of any of these items. This means by switching suppliers or retailers to get things cheaper. Comparing prices across lots of places can be done online and you might be surprised how much you might be able to save. Even if you think you shop in the very cheapest places you might be surprised when you compare prices that perhaps a pound shop is not a cheap as you thought when you find the same items for sale in other shops for less.
It might be that you will not have to go without luxury items for that long, just until you are on top of your debts and do not feel that your debts are getting worse and worse.
Keep a budget
It is really important to keep a track of your spending. You will then know exactly how much you will have to pay out and what you have left. If you know what you need to spend on luxuries and how much money you have coming in, then you will know what you have left to spend on other things. You can do this in a excel spreadsheet or just write it down. Note your monthly income and your monthly necessities and then you can see what is left. If you are struggling with debt then it is wise to spend all or some of what is left to repay some of that debt. If you do not have enough money to even cover the basics then you need to find a way of earning more money or downsizing so that you can manage your costs. Always stick to the budget and you should be able to stay on top of the debt.