If you’re one of the thousands of people that struggle with debt every day, it can certainly be overwhelming. But no matter how bad things seem, there’s always a light at the end of the tunnel. With the right budgeting software, you can plan your budget online and slowly make your way out of debt.
As one of today’s leaders in budgeting software, the team from CalendarBudget have a few solid tips to help you make your way out of the debt cycle for good and start living your best life!
Track Your Spending With Our Budgeting Software
One of the best ways to get a handle on your debt is to track every aspect of your spending. You need to know what got you into debt in order to prevent it in the future. You can easily track the ins and outs of your money by using online budgeting software. You can personalize it to set reminders when bills are due and keep track of what you need to spend each month on necessities, and where you need to cut back.
Set up a Working Budget
Once you have a good idea of where most of your money is going, it’s time to set a budget that works for you and your family. We say “working” budget because some months you may have unforeseen payments that crop up, so leave a little bit of flexibility when creating your budget. For inspiration, include your financial goals and what you want to do once all of your debt is paid off. When creating a new budget, work from scratch and as time goes by, add to it bit by bit. After all, life can change at the drop of a hat, and you need a budget that allows you to plan for those changes.
Avoid Borrowing Money
This is one of the main reasons why people fall into debt in the first place. Just don’t do it! Don’t borrow money! Once you start, it’s harder to stop, and the problem multiplies over time becaue you’re trying to catch up on the money that you borrowed in the first place. Borrowing money from lenders with high-interest rates can make it easy to fall into a cycle of debt that can be tough to get out of, so stopping this habit as soon as you can or even before it starts is key. It isn’t always easy but if you stick with steps one and two, tracking your spending and following a budget, chances are you’ll find that you need less money to live on each month and actually avoid using credit.
Come Up with an Action Plan to Pay Down Debt
Having a plan to pay off your debt is a good way to face the problem head-on. Having an action plan, like the debt snowball or avalanche method is a great idea. This method is when you pay the minimum requirements on all of your debts except one. That one debt, you pay all that you can, enabling you to pay things off quicker. As you pay off each of your debts, you can then begin allocating the freed-up funds to the next debt until they are all taken care of. Being debt-free… adulting never felt so good!
Get the Family Involved
Another good way to rein in your debt is by getting your family involved in the monthly budgeting process. This way everyone is on the same page. Not only is putting all the responsibility on paying off debt onto one person extremely stressful for them, but it ignores all the great contributions other family members can make. They might have some good ideas, like cutting back on groceries or other ways to save around the house. At a minimum, other family members will be motivated to change their spending habits when they realize how they are contributing to the debt load.
Consider Balance Transfers
A balance transfer is when you transfer your credit card balance from one credit card to another, which will provide you with a 0% interest introductory rate for a while. However, doing so often comes with a fee you’ll need to pay upfront, and most often, the introductory rate will only last a year. So, only consider this option if you’re confident you can pay off all of your debt before the year is through. Read the fine print (terms and conditions). Do your research to ensure it will actually save you money in the long run. Consider any changes in interest rates, transfer fees, and use your budget to ensure you will actually save money in the long run.
Consolidate Your Debt
Consolidating your debt is a good idea if you have a lot of payments to make and not enough income. You can easily consolidate your debt by placing all your debts under one umbrella. However, you need to be careful when doing so that you’re not making things more difficult for yourself. Having all of your debt in one place should give you lower monthly payments. Don’t let that fool you into thinking you have extra money to spend. This method will only make things easier for you if you also follow the lifestyle tips of tracking your spending, using your budget, avoiding adding to your debt, making a debt payment plan, and working together as a family to reduce and eliminate your debt.
Pay More than the Minimum
Some months, you might have extra cash on hand. Although spending it on something else might be attractive, first consider paying more than the minimum on your debt. Doing so will bring you one step closer to eliminating your debt. Each month, you should be setting aside approximately 20% of your total income toward debt payments. Then when you find that you have some extra money lying around, bump up that percentage to be debt-free faster than you thought possible.
Anthony Geraci was excited to share his budgeting experience saying, “I have my finances projected out to 2025, [which was a few years at the time of his comment] and I always know how much my bank account should have in it. CalendarBudget helped me organize my life and pay off my student loan way ahead of schedule, saving me nearly $17k.” We are so excited for Anthony and love hearing your success stories.
Try Renegotiating Your Credit Card Debt
Many might not be aware of it, but there are ways your credit card company will work with you to negotiate your debt. After all, they want that money paid off just as much as you do. You can contact your credit providers and see if there’s a possibility to request a lower interest rate or lower fees when using your credit card. Additionally, you can also try lowering some of the other bills you have by simply calling your utility providers and seeing if they can help make your payments less of a burden. When was the last time you actually used cable TV or your movie streaming service? Do you have any expenses you could eliminate, then apply that money to pay down your debt faster?
Enlist the Services of a Professional
In addition to using a budget calculator like the one from CalendarBudget, enlisting the help of a financial advisor, debt counselor, or another financial professional to help you consolidate and get a handle on your debt can also be a great idea. A financial planner, for example, will know how to get you the very best rates on all of your credit cards and be able to contact providers on your behalf to negotiate for your benefit.
Get out of debt today with our innovative budgeting software !
If you want to begin your journey to living a debt-free life, CalendarBudget can help. Contact us online today for a FREE TRIAL!