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5 Steps on How to Get out of Debt

By Administrator 13 September, 2016

Are your debts piling up? Are you starting to lose sleep over your financial situation? Are you wondering how to get out of debt? Here are 5 steps that you can implement in your life to help you gain more control over your finances.

 

  1. Create a budget.

 

The first thing that you can do is to create a budget. A budget will help you manage your finances and control how much you are spending and what you are spending it on.

A budget means that you will be living below your means, not over-spending on excessive items or services that you do not need.

However, it is crucial that whatever budget you create is realistic. There is no point in developing a budget that you will inevitably break, as this will help neither your financial situation nor your morale.

 

 

  1. Earn extra cash

 

Another tip on how to get out of debt is to keep your eyes open for opportunities to earn some extra cash. This could mean renting out usable equipment or tools that are gathering dust in the back of your shed, or renting out free space. It could also mean selling unwanted clothes, household items or holding a garage sale.

 

 

  1. Eliminate unnecessary expenses

 

As well as earning extra cash, you can also get out of debt by trimming expenses. This means going over your budget, seeing what you spend money on and if you can reduce or eliminate some expenses. For example, do you eat out every Saturday? Try a home cooked meal. Do you have a gym membership that you hardly use, or a magazine or book subscription? Cancel them until you get control back over your finances.

 

 

  1. Prioritise your debts

 

If you want to learn how to get out of debt, then you need to learn how to prioritise your current debts. While it is important that you try to pay them all, some debts should be paid before others. Debts that should be given first priority include your mortgage or any payments that have high-interest fees, as these will accumulate over time.

If you are wondering how to get out of debt, implementing these 5 tips can assist you. However, if you find that your debts have spiralled out of control and you need to talk to a debt consultant, then please contact Debt Free Australia. DFA are passionate about helping Australian’s secure a financially brighter future and have over 20 years of experience in the industry. Call us on 1800 676 598 to ask one of our licensed debt experts for free and confidential advice now.