How to Get Out of Debt - Long Term Goals
If you have already taken the initial steps to get your debt under control by making small changes in the way that you spend and save money, you may be interested in taking your financial rehabilitation plan to the next level. For most individuals, this means taking a long-term approach to ensuring that their financial security is not in question for the foreseeable future. Like any type of rehabilitation plan, keeping your debt under control means constant monitoring and diligence to avoid mistakes and the slipups that landed you in trouble in the first place.
If you have not already done so, you should use your budget to create a detailed spending plan for the month. Accounting for as much money as you possibly can is one of the single most effective ways of monitoring where your money is going and when. Aside from planning ahead for all of the bills that you can account for on a regular basis, you should also determine an amount of money that you intend to save with every check. Getting into the habit of regularly setting aside some money for savings is something that you will not regret. Do not worry if you cannot afford to set aside a large amount right now.
This is also the time for you to consider taking some larger steps in order to increase the amount of money that is coming in every month. This may mean getting a second job or selling some of your more valuable assets. Each individual's circumstances will be different, but if it is at all possible for you to increase your income, you should do so. Most experts agree that any money earned from a second job should go directly to paying down your debt.
If you are not sure about which debts to concentrate on, this is also your opportunity to prioritize your debts. Most experts will recommend that you do this by paying down the higher interest loans and credit cards first. The higher the interest, the more money it will cost you in the long run to keep that debt hanging around. If it is possible, you may also want to consider transferring the balance of your high interest cards to lower interest ones in order to save yourself as much money as you can. Not only will this allow you to pay your debts off sooner, it can also help protect your credit score.