Investment Updates
Seven Steps To Digging Your Way Out Of Deep Debt
Published Sunday, February 9, 2014 at: 7:00 AM EST
If you owe a lot of money to multiple creditors, it’s easy to feel your situation is hopeless. Yet while digging out of a mountain of debt is never easy, taking a systematic approach may help you make progress. These seven steps could be part of an effective action plan:
1. Conduct a personal inventory. Figuring out how and why you fell into debt can help you work your way out of it. But that requires a thorough examination of your personal spending and saving habits. In addition, you’ll need to determine the amount of funds you have at your disposal, including cash or cash-equivalent assets on hand and other investments that you might liquidate. Doing a complete accounting of your finances could help you build a solid foundation for a plan to reduce what you owe.
2. Cut back on credit card spending. It’s so simple to use a credit card—and all too easy to inflate account balances with a splurge at the mall or too many online purchases. If you can resist the impulse to buy the latest cool gadget or this season’s pricey outfits, you’ll keep your financial situation from getting worse and free up cash to start retiring your debts. That doesn’t mean you never can take advantage of a credit card’s convenience, but it does mean training yourself to buy only what you can afford.
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