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4 Things to Try Before Debt Consolidation



4 Things to Try Before Debt Consolidation

Many people who are in debt think that the only way out is to seek the help of a debt consolidation agency. But this should only be as a last resort if all else fails.

Remember that millions of people all around the world who were deeply in debt have managed to climb out of debt without the help of such agencies. Here are some methods you should try before considering debt consolidation.

Cut Up All of Your Credit Cards

I know that this can be very hard to do, but this piece of advice will crop up time and time again on this blog. Before you embark on your journey to reduce and clear your debts, you must stop adding to your debt. From now on, commit to not spending any money you don't have.

Cut up all of your credit cards. If you really must keep one card in case of an emergency, but give it to a trusted family member to look after and make sure that they will only give it to you in a real emergency. 

Give them strict instructions not to let you have the card unless you explain the emergency to them. Apart from real emergencies, from now on you only spend the money that you have in your hand.

Make Use of Cash Budgeting

Work out a monthly budget that is less than your total income.

At the beginning of every week, take out the amount of cash that you have budgeted for the week. Throughout the week, resolve not to withdraw any more cash and don't use your debit card either.

This will make your budgeting much more powerful. If you commit to doing this you shouldn't go over your budget.

Reduce Your Debt With The Snowball Method

This is the method I used and I've been debt-free for almost 22 years now. (I have a publication which explains the "Snowball Method", and I will be giving it away free to my followers, so be sure to sign up for updates.)

Briefly. The Debt Snowball Method involves paying off your credit cards one at a time, starting with the smallest amount. Once that card has been paid off, you will add the amount to add to the minimum payment on the next card. and so on, until all the cards are paid off.

Take a Chunk Off Your Debt by Selling Stuff You Don't Need.

A great way to kick-start your debt relief program is to raise some extra cash by selling unwanted items on eBay.

Take a look around your home, including the garage, the attic, and any other storage area you may have. Take a note pad and make an inventory of everything you have.

If you haven't used something for more than six months, list it. You can sell just about anything on eBay. You might be surprised at how much you have to sell and how much cash you can raise once you put a whole batch of items up for auction.

You could also try to sell unwanted items locally through one of the many apps on your smartphone.

Use all of the money you raise towards paying off your debt. Don't be tempted to go shopping!

Getting yourself out of debt is always going to be cheaper and better for your credit than having a company do it for you. However, if all else fails or you are unable keep to your plan you may need to seek professional help. Seeking help from a professional is still a better option than filing for bankruptcy.

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