Knowing that you have a large amount of credit card debt hanging over your head can feel stifling. Your money will be going toward interest payments instead of toward things you want, and there will always be the worry about what will happen if you can’t make a minimum payment one month. Luckily, there are many ways to alleviate the burden so you can breath easier knowing you have paid off your credit cards.
Getting out of credit card debt involves a two pronged approach. The first prong is to set a budget, the second is to make more money.
The First Prong: Set A Budget
Setting a budget is fairly simple though it can be time consuming, so set aside a couple hours specifically to work on your budget. Ideally, you should have everyone in the household old enough to participate in finances working on this budget with you during this time. Having other household member work as a team to create the budget means that everyone will feel ownership of it and will likely do a better job of sticking with the budget.
To get started, you’ll want to list out all of your set bills. These are things you can’t avoid. Rent/mortgage, car payments, utilities, that sort of thing. Next you’ll want to look at the amount you currently spend on necessary but variable expenses. How much do you spend on food? Is there a way you could spend less on it? Personally, I recommend cutting out eating out, shopping at cheaper grocery stores, and buying store brand products.
Once you’ve calculated how much money it’s necessary to spend a month, compare that to your income. If there’s any money left over, allot part of it to fun money and the rest to paying off your debt. Fun money might seem like something you can cut completely, but I don’t advise that method. Eventually you’re going to get bored and want to spend money on entertainment, or something unexpected will come up that you’ll want splurge money for. It’s better to have this budgeted in advance than it is to break your budget spending the money anyway.
After your budget is written and everyone has agreed to it, you’ll need to find an easy way to stick to it. The envelope system works fairly well. This system involves putting cash amounts of the money you’ve budgeted for variable expenses in envelopes. You then spend from those envelopes instead of using a card. This makes it easy to tell how much money you have left in your budget.
If possible, you may also choose to downgrade big ticket items such as cars and living arrangements. If you’re on a lease, you can wait until the lease is up then move into a cheaper apartment. If you’re leasing your car, you can also trade that in for a cheaper vehicle at the end of the lease. These decisions will make a much bigger impact on your budget, but are generally more difficult to make.
The Second Prong: Make More Money
The second prong of attacking your credit card debt is making more money. This goes hand in hand with your budget, because if you continue spending as little as possible while making more, you will be able to more rapidly pay down your credit card debt.
There are all kinds of ways to make more money. If anyone in the household who is old enough to work but not currently work, they can get a job and contribute to the finances. If you’re only working part time you can try to increase to full time hours or get a second part time job.
The best way to make more money is simply to get a better job. Go on to job search engines such as Indeed.com and look for jobs that pay more than your current job. Apply to jobs even if their requirements are a stretch for your current qualifications.
The qualifications on most jobs are more like a wish list for employers. They have an idea that this is what they want, but they will likely accept someone with different qualifications if they feel that person would be a good fit for a job. Remember that most skills can be trained fairly quickly, but motivation and a good personality can’t be learned on the job. That’s why most employers will favor those traits heavier than they favor qualifications.
The quickest way to earn more money is to get another job. Jobs such as waiting tables are generally higher and will have fairly flexible hours that can be worked around your primary job. If an extra part time job out of the house is not an option, you can choose to work online instead. This will work especially well if you have a skill set that you can use to freelance online. Computer programming and web development are always highly in demand. You can even learn computer programming with a free online class, then use that skill to freelance for extra money!
Learning a skill will take time, however, and if you need money quickly to get your debt paid down, there are options that require fewer skills. Many people in our modern world like to hire virtual assistants. There are plenty of these jobs available and the tasks required are simple to complete. Mostly it will involve the kind of busy work that most people don’t wish to deal with. You can search on sites such as upwork.com for virtual assistant jobs.
Getting out of credit card debt can seem an insurmountable challenge, but once you break it into easily obtainable steps you’ll see that you can conquer the problem. First, build your budget to make sure you aren’t going deeper into debt and find money you already have that can be directed toward paying off the debt. Second, find ways to increase your money intake so that you can direct your new money flow toward paying off the debt.
If you complete these two prongs, you will find yourself out of credit card debt and ready to live your best life.