5 Simple Steps for Debt Relief That Actually Work

5 Simple Steps for Debt Relief That Actually Work

As you review your finances, you may come to find that you’ve accumulated more debt than you thought.

While this is a frustrating and stressful revelation, there are debt relief steps you can take to improve your situation in the near future.

When it comes to debt relief, you need to be careful of every step you take and every tip you follow. There is a lot of bad information out there, along with a variety of scams that can put you in an even worse position.

Here are five simple steps to debt relief that actually work:

1. Review Your Finances

You can’t do anything until you take this step. For example, the average American has a credit card balance of $6,375. If you come to find that you’re in the same boat, you need to understand what this means and how to take action.

As you review your finances, pay attention to both the good and bad. As long as you’re informed of your situation and honest with yourself, you’re in position to push forward with success.

2. Review Your Budget

Do you have a budget? If so, now’s the time to review it in great detail. Ask questions such as:

  • How much money do you earn each month?
  • What are your total expenses?
  • Are there areas in which you can cut back?

At first glance, you may assume that everything about your budget is in order. However, as you dig deeper, don’t be surprised if you come across details that require your attention.

3. Create a Plan

You’re never going to reduce or eliminate your debt until you devote yourself to creating a plan. Furthermore, you need to implement a plan that you trust and are able to follow.

Above all else, make a list of all your debts, including the balance and when it’s expected to be paid off in full.

From there, make a decision on where to start and how to stay current with all your payments.

Tip: there’s nothing wrong with altering your plan over time. As you make progress, you may come to find that adjusting your approach will help keep you on track.

4. Negotiate Your Payments

Maybe you’re okay with your debt load the way it is. You’re earning enough money to pay your debts, even if it’s taking time to make progress.

Conversely, you may realize that you don’t have enough money to stay current. This is when it makes sense to contact your credit card companies and lenders to discuss your situation.

For example, you may be able to negotiate down medical debt if you offer to pay the balance in full. Just the same, contact your credit card company to see if they can cut you a break on your interest rate.

You’ll never know if a creditor is willing to negotiate until you make contact, explain your situation, and ask what they can do for you.

5. Stick with it

As the days turn to weeks and the weeks turn to months, you may come to find that you’re not progressing as quickly as you would like.

Even though you may feel like giving up, you’re just about to turn the corner. Stick with your debt relief plan for as long as it takes to reach your end goal.

Tip: creating small, short term goals makes it much easier to stay the course.

No two people take an identical approach to debt relief, but following these five simple steps will absolutely put you in position to succeed.