How to Stop Fueling Your Personal Debt Cycle

It can be stressful to wake up to debt every day. But it’s a situation many of us find ourselves in at some point. The good news is that there are solutions worth trying. These are a few ideas for how to stop fueling your personal debt cycle.

Create a Budget

Budgeting is one of the most powerful tools for people trying to break out of their debt cycle. Not knowing exactly where your money’s going is a recipe for falling into debt. Creating a budget is one of the most basic, but effective, ways for people caught in a perpetual debt cycle to get out. 

There are a few things you need to do in order to budget correctly. First, you need to get all your financial documentation. This will include anything that details an income or expense. You’ll then need to tally all those up to see exactly how much you’re spending and earning each month. Determine which of your costs are fixed, such as rent and car payments, and which ones are variable, such as food and gas. 

Once you’ve done all this, you can look at your costs to find places you can trim expenses in order to free up more money. 

Cut Up Your Credit Cards

If you need to get out of perpetual debt, it’s important you avoid the thing that keeps you there most: credit cards. They have high interest rates and can distort the reality of how much you’re able to safely spend. 

There are lots of reasons people get into credit card debt. It’s been found, however, that medical bills are actually the most common factor for causing people to file for bankruptcy. This isn’t something that can really be avoided. At least by cutting up credit cards, you force yourself to acquire less new debt.  

Talk to Debt Experts

When you’re unable to get out of debt on your own, you should consider the possibility of talking to experts. It’s smart to start off by talking to a credit counseling service. This will give you some free information, like strategies for budgeting, and where to look next if budgeting alone isn’t enough for you. 

From there, you can decide whether to pursue debt management, settlement, consolidation, or do-it-yourself repayment.

Change Your Lifestyle

No matter who you are and how you’re spending your money, it’s important to make lifestyle changes if you want to bust out of your debt. For some people, it might be really hard to make major changes all at once. It’s generally better to start small with things you actually know you can stick to, and then make gradual progress in the right direction. 

It’s possible that you’re someone who doesn’t live a lavish lifestyle, but still can’t manage to get out of debt. People in this situation might need to consider looking for other forms of work that will bring in a higher rate of pay, or possibly getting a side job. 

Sell What You Don’t Need

Any amount can make a difference in helping you pay down your debt. If you have items sitting around your house just collecting dust, it’s time to use those things to help you regain control of your finances. 

Selling things you’re not using is easier now than ever before thanks to sites like eBay, Craigslist, and Etsy. Generating some cash flow from old items to pay down your debt will give you a start in the right direction. 

It’s not necessarily fun nor easy to break out of a debt cycle. But it’s something you need to do in order to have financial freedom. Consider the ways these tips can help you get there.