Though your personal debt may seem insurmountable, you can still learn how to get out of debt with no money. There are many positive things you can do right now to get to a debt-free life. Here are some tips for you to consider:
Know your spending habits
If you really want to know how to get out of debt with no money, then the first thing you need to know is how you spend each and every penny. If you aren’t sure, faithfully write down what you spend in a week. Do not leave anything out from the morning coffee, to drinks after work on Fridays. It is really difficult to figure out how to attack your debt if you don’t know where your money is going.
Assess your spending
Before you even start on a budget, assess your spending. Sometimes we spend money on things that we don’t need, like 60 cable channels when we really only watch shows online. Or unlimited cell phone calls when all we do is text. Go through your spending and see where you can reduce. Once you know, move on to making a budget.
Make an honest budget
Making a budget is not an exercise in how you want to live and spend one day. Budgeting starts with an accounting of your income and spending as is. You have to be honest with yourself. If you need that morning coffee and you know you are going to get it, budget it in for now. Budgets can be tightened up as you go.
Don’t forget to save
When you make a budget, don’t forget to add in a small amount that goes towards your savings. To be debt free is critical, but having a little tucked away, and watching that grow, can be a great motivator to control spending.
Just make one decision
Put your debts in order of priority to pay them off, then stick to your plan. One tactic is to pay off the lower amounts first, and pay the minimum payment on the others. This way when you get to the larger debts, you’ll be able to make larger payments on them. However you prioritize, give it time to work.
Small payments count too
If you get a small amount of money that you were not expecting, like a bonus at work or a tax refund, add it onto the debt you are currently paying off. A few small amounts here and there can add up to a sizeable amount over time.
If you didn’t create your debt in a week, then chances are it will take more than a week to get it all paid off. Stick to your plan and re-evaluate after some time has passed, or set a benchmark to review your debt plan after each debt is paid off.
Once you have your spending better managed, a budget and a plan, you will feel more like you can control your debt, rather than it controlling you. To get more information and learn more about how to get out of debt with no money, contact one of our counsellors.