Bankruptcy Prevention and Credit Repair

Do you feel like you have debt up to your eyes and there is no seeing your way around it?  You’re not alone.  According to the 2016 NerdWallet analysis, it’s a fact that on average the common U.S. household is in nearly $17,000 of credit debt.

If you’re looking for some ways to cut down on cost and see your way through debt, Time Travel has 10 tip that may help.

Tip #1 Create A Budget

One of the first steps and possibly the hardest is to create a budget for your spending.  While there are several different personal financial tools out there that will help you with this, (Mint.com) oftentimes a simple Excel spreadsheet that maps out your monthly expenses will do the trick.

Be sure to categorize and list every one of your expenses; this includes both luxury and necessity based items.  Once you have a clear vision of your debt landscape, you will have to then scrutinize them.  Eliminating all that are unnecessary, or any that you can live without.

If you continue to spend as you do and don’t have the surplus income to justify it,  you will never get out of debt.  Cutting the expenses is must for debt relief.

Tip #2 Prioritize Your Payments

Not all debt has the same value.  Some is more expensive than others; credit cards often have varying rates and balances.  Pay more on the card that is accruing the largest amount in monthly interest.

This will generally be the one with the highest balance.  While doing this you should continue to pay the minimum amount on all the others.  NEVER stop paying, that will only make your credit score drop.

By prioritizing your  payments in this order you will  effectively eliminate a more detrimental portion of your overall debt first.  Helping you become debt free faster.

Tip #3Pay More Than The Minimum

Because  the a large portion of your monthly payment is going towards interest, when possible pay more than your minimum balance due.  By paying more than your minimum, you will end up paying far less in interest long term.

If your payment is $100, find a way to pay $150, $175, or $200.  You will be surprised at how much faster you can free yourself from overwhelming debt.

Tip #4Credit Line Balance Transfers

Believe it or not, applying for and receiving more credit in a time of financial hardship can actually be a great strategy.   Depending on your current credit condition and level of debt you are facing, you may be able to receive a new credit card with a  0% credit line.

Many card companies offer 0% balance transfers, all the way up to 24 months.  If you’re able to transfer some of your high percent credit card debt to a lower interest card this will again enable you to better pay down the principle balance.  It may help you avoid paying 100’s of dollars in long term interest.

Tip #5Stop Charge Your Cards 

If you’re already in trouble with debt, spending more on the cards is simply fueling the fire.

We recommend removing all the credit cards from your wallet.  It’s just too easy to swipe that card for gas, lunch, or an evening out, even for the most discipline individuals.

By removing the availability of using your credit you are proactively protecting yourself from accruing more high interest debt.  I don’t care if you are earning points and travel miles.  They will have to be put on hold.  =)

Tips #6  Put Bonuses Toward Your Balances

 If you have accrued cash back from purchases, use it to pay down your debt.  If you receive bonuses from your workplace, use it to pay a portion of your debt, rather than spending it on some luxury based purchase.

We didn’t say this would be easy.  Getting out of debt takes sacrifice, you may have to give up something to get free.

Tip #7Exercise Self Control

 If you’re a compulsive shopper and have a lot of online accounts you should remove all card information from them.  In today’s digital age, shopping on the web is extremely easy and can often lead to uncontrolled spending.

Protect yourself from the ease of spending online and make your next purchase more difficult than just a few short clicks away.  If you require yourself to physically fetch your credit card in order to make payment, you are given a second chance to reconsider your purchase.

Lets not forget the big picture, financial freedom is of greater value than your next designer handbag or tool kit. Stay focused!

Tip #8  Clean Out The Closets

The old saying “One man’s garbage is another man’s treasure” rings true here.  Often times people who are experiencing debt are surrounded by the materials that got them in such a predicament.

Look around your house.  Collect all items that you may have purchased or received in the past and simply don’t use.  Put a price on them and place them up for sale.  It’s time to clean out the closets and get rid off everything that can be converted into cash.

Ebay, or your local listing site are great ways to quickly sell these items.  Any profits from the sales will be put toward paying off your debt.

Tip #9  Change Daily Spending Habits

Changing your daily habits will can greatly decrease the rate at which your debt increases.

Often times its daily expenditures that are the real pain in the neck to your debt based burdens.  Before you go an spend 6 dollars on your daily latte or eat out for lunch instead of packing a sandwich, think about your debt relief goals.

These expenses while small, will add up fast.  Making the sacrifice to not spend money or charge credits cards for luxury based items is a habit that will take you to the top.

Tip #10Be Rewarded

Reward yourself for good behavior.  Set debt milestones and once you meet those goals treat yourself to something nice.

Remember to control budget before you do this though.  Instead of going on a shopping spree buy a single top instead.  Or instead of taking that next flight to Vegas, plan a weekend camping trip.

Never lose focus.  While  it’s important to reward yourself for your dedication and achievements, it can often be easy to slip back into your old habits.

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