Unfortunately, if you are feeling overwhelmed due to debt then you are not the only one with this feeling. Recent calculations have indicated that average American household seems to have more than around $90,000 worth of debt combined. So, you are just like a small droplet in this huge sea of debt! Moreover, some other calculations insist that the average credit card debt is going to be over $16000 and the auto loan can head towards $27,000. Then you have the average student loan, which can be over $48,000. If you consider the household income of $52,000 yearly, it clearly shows how much you are going to be neck down in debt!
For single moms out there, it becomes really very difficult to manage debt as they have to raise kids all by themselves. Chances are high that they are the first ever victims of debt. Now, everything is not all grey and sad for them. There are some proven ways available, which will clearly prove that you can accumulate debt at some point and start working on it to get rid of the mess in no time. For that, you can try gaining some ideas from debt consolidation without wasting time at all.
Tally it all up:
The first step to getting rid of the debt related mess is by tally it up. It Is actually next to impossible for you to pay off debt if you are not even sure from where you should start it. Yes, it is totally understandable that you might hesitate initially totally all up as you are not mentally prepared to see the massive amount, but it needs to get done at some point or the other. So, the sooner you get the mess covered the better. You have to be completely honest with yourself. It is time for you to pull out all credit card statements, personal loans, student loan bills, car, and furniture loans and then start adding those points up.
Work on your ways to create a budget:
If you can easily create a budget first, that will help you to understand the amount of extra money you can come up with after all your basic requirements are covered. You can use those extra bucks for repaying the debt shortly. If the added amount ends up at a minimal rate, you don’t have to worry about that. It is just the starting point. You will come across plenty of ways to slash down some unwanted expenses and add those amounts in your extra one. In case this is your first time ever in creating a budget and if you need help, then you can get some free printable options online to hit it off.
Determine your attacking plan:
Whenever the time has come to pay down debt, there are two major ways to do that. One is the debt avalanche and another one is debt snowball. In terms of debt snowballs, the list will go on from a smaller amount to the larger ones. You can head start by eliminating the smaller balance and then make your minimum payments to way up to the top. It is more like preparing yourself mentally for paying off a debt in a slow yet steady step.
Another method in this regard got to be the debt avalanche. Here, the method is completely opposite to the snowball one, where you can list debt in order from highest interest rate to lowest one. After that, you will start working on your ways to eliminate the highest interest rate while going to make minimal payments anywhere else. Over the long run, this method will help you to save some bucks.
Always remember to keep an emergency fund in order:
Before you end up working on the actual debt payoff, you might have to get at least a minimum balance in your emergency fund. Keeping some money aside will help you to get some bucks during emergencies and will keep you from relying on credit cards or any other form of debt whenever something important comes up. If you can end up saving minimum $1000 under the emergency fund, then you are covered for good during any immediate cash help. Little bits of cash here and there can help you reach the $1,000 minimum, or if you expect a refund at tax time then that is a great way to accumulate a potentially large sum of cash quick.
Cut down your use of credit cards:
Other than a payday loan, credit cards are some of the worst forms of debts you could have asked for. The case is same for single moms out there as well. The interest rates associated with credit cards are quite astronomical and you might end up spending years while trying to pay down the balance. In case credit cards have gotten you into trouble, then you need to cut them out from your life. Turn towards green cash and this will help you to take total control of your money flow.
Always treat debt as an emergency:
Debt has the power to hold back your dreams. Being in debt can easily hold you from building up savings and will not make you financially stable at all. It can further keep you from reaching any of your financial independence. Therefore, it is mandatory to treat debt as an emergency and solve the issues as soon as possible. Right from avoiding debt to other issues, you have to cover it all before the matter gets out of hand and you are into the budget of debt all over again.
Lower your phone bills:
It is a known fact that due to office purposes you might have to work on so many phone calls. Moreover, as you are a single mom, so you are always answerable to your close relatives about your whereabouts and your life. That calls for more phone bills. Try lowering those bills down as much as you can. This will further help you to save some bucks.
Following these simple yet effective norms will help you big time in addressing your debt. Being a single mom, you need some saved bucks in your hand for your children and their future.
This post may contain affiliate links. Please visit the disclaimer page for more information.