Do This If You Are Drowning In Debt

Last Updated by Neiko Johnson on 
January 16, 2022
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Many people are drowning in debt these days.

It's not just the typical student loans that many graduates carry with them for their entire lives, but it is also medical bills and car payments.

The best way to get out of debt is to avoid getting into debt in the first place.

But if you find yourself drowning in credit card bills, there are some steps you can take to start paying off your debts faster than ever before!

Here are some tips that will help if you are drowning in debt.

Get Organized

Get a piece of paper and a pen, and write down the total amount of debt that you owe.

Next, divide your debt up into categories: credit card bills, car loans, student loans, etc.

Being organized with your finances will help you feel better about drowning in debt. It's important to focus on your current debt and stop taking out more debt.

Related reading: Should I Refinance My Student Loans

Brainstorm ways to pay off each category of debt

If you have a high-interest rate credit card, call the company and try to negotiate for a lower rate.

If your car is about to die but has plenty of life left in it, consider selling it on instead of taking out another loan for a new one.

There are plenty of ways to get creative when it comes to paying off debt, so be sure to brainstorm as many solutions as possible.

Create a budget and start living by it

Your budget should include all of your monthly expenses, such as rent/mortgage, car payments, groceries, and utilities.

Be sure to leave some room in your budget for unexpected expenses and save money each month so you can start paying off your debt.

Start paying more than the minimum payments on each of your credit cards.

If you can't afford to pay extra, consider canceling some of those high-interest credit cards and transferring balances to a card with a lower interest rate (if possible). You might have to get rid of that rewards program if it's not worth the extra cost!

If you're not used to living within a budget, it may take some time to get used to, but it's well worth it in the end.

Track where every penny goes and see where you can cut back on your spending.

There are plenty of online resources that can help you create a budget, so be sure to do some research and find one that works best for you.

Related reading:

Budgeting 101: How to Create a Budget

Start Saving For a Rainy Day

If you are drowning in debt, chances are that your rainy day fund is nonexistent.

A rainy day fund is another word for an emergency fund.

This is money that you save so you have a cushion in case something unexpected happens, such as losing your job or getting into an accident.

It's important to start saving for a rainy day if you are drowning in debt because you never know when something might happen.

You can start by setting aside $50 or $100 each month until you have enough saved up to cover at least three months' worth of living expenses.

This may not seem like a lot, but it's a start!

It's important to start saving for a rainy day fund if you are drowning in debt. This way, you know that you have some extra cash to help get you out of a tough spot.

You will need to be able to pay for unexpected expenses, such as doctor visits and emergency car repairs without having to resort to racking up more bills on credit cards or loans.

Debt is not fun, but there are ways to get out of it if you are drowning in debt.

Start by getting organized, brainstorming solutions, and creating a budget.

Then start saving for a rainy day so you have a cushion in case something unexpected happens.

Related reading: 20 of the Best Ways How to Save Money

Stay motivated!

It's easy to get discouraged when you're drowning in debt, but it's important to remember that there is light at the end of the tunnel.

It's best to always have something that you are working for and have a purpose for getting out of debt.

Drowning in debt can be very intimidating but always remember to take it one day at a time so you don't become overwhelmed.

There are plenty of resources out there to help you get started on your journey to becoming debt-free.

We started with $460,000 of debt and it was scary. But, we created a plan and a solid blueprint that helped us become debt-free in 4 years.

Don't be afraid to ask for help if you need it – everyone drowning in debt could use a little support!

Keep your chin up and stay focused on your goal of becoming debt-free.

With a little bit of effort, you can get yourself back on track in no time!

Click here to get access to our free course 7 Secrets to Supercharge Your Finances

Final words - Do This If You Are Drowning In Debt

If you're drowning in debt, one of the most important things to do is work on living within your means.

A budget will help keep your spending under control and stop it from spiraling out of control.

You can start by cutting back on how much you spend each month so that you have money left over for paying off any loans or credit cards.

Another option is to get creative with side hustles or a cash-only job that pays well enough to cover basic expenses like rent and groceries without going into debt again! If all else fails, don't be afraid to ask for help - there are plenty of resources available online where people just like yourself share their experiences working through personal finance problems.

The key takeaway here is: if you're drowning in debt, take some time to assess your situation and come up with a plan of action. Stay focused, motivated, and positive; it won't be easy but you can do it!

Thanks for reading! Be sure to check out the rest of our blog for more helpful tips on personal finance and money management.

Article written by Neiko Johnson
Neiko is a personal finance expert and Co-founder of Secret to Finance. Along with his wife Alexis, they learned how to get out of debt and paid off $400,000 in 4 years.

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