Strategies to Reduce Your Debt without Filing for Bankruptcy
There are many people out there who have a lot of consumer debt and would like to reduce their debt or get out of debt completely, but are unsure of how or where to start. Waiting for too long to take back control of your financial situation can have disastrous results. The best time to start getting out of debt is always right now, before you let it go too far and reach the point of bankruptcy. Here are a few strategies we suggest to begin to reduce your debt and avoid bankruptcy in the long run.
Create a budget and write down every dollar that you spend
This may not seem like a debt reduction strategy, but in order for you to reduce your debt you need to stop overspending. In order to not overspend you need to know how much is available to spend after all of your bills are paid. Make a budget that includes every monthly expense and then also keep track of where every dollar goes to make sure you are sticking to your budget.
Using the debt avalanche a person will take a look at all of their debt and will start to pay off the debt with the highest interest rate first. Sometimes the debt with the highest total amount is worked on first or even the debt with the highest monthly payment. Once that first debt is completely paid off then the second highest and third highest is paid off until all of the debts are paid in full.
On the flip side of the avalanche method is the debt snowball method. Using this method one would pay off the smallest balance first and then work on the next smallest and the next until all of the debt is paid in full. This method works well for people who are motivated by seeing quick progress.
Regardless of which strategy you use, it is important to keep track of your progress so you can see how far you have come. This helps to stay motivated and on track to getting your debt completely paid. There are many resources on line that you can take advantage of to help you on your journey such as debt repayment calculators and budgeting tools. These are all great ways to help you on your journey, but what if those tools aren’t enough to help you get out of debt?
If you have done all that you can on your own and you still can’t get a handle on your debt and finances, then it is time to give 4 Pillars Lethbridge a call. At 4 Pillars Lethbridge we ask the important questions, we listen with care to our clients and then build a plan to help our clients succeed in their debt repayment. We work for our clients not for the creditors so our clients always come first. If you would like to have a free consultation to see what we can do for you please give our office a call at 403-332-7361.