The debt level of Americans has been rising for years. Less than twenty five percent of households in America are debt free. In a 2021 study by Experian, Americans had over $95,000 of debt. Over time, this amount of debt can take a toll on a person.

Debt can be an unwelcome burden. The impact can increase a person’s stress level and take a toll on their everyday life. Paying off your debt requires patience and persistence, so here are a few tips that may be able to help you pay down your debts and improve your financial situation.

Create and Live on a Budget

You may have tried to make a budget and live on it in the past, but for whatever reason you were not able to adhere to it.

You could have an issue with your debt-to-income ratio. This is where you do not make enough money to cover your monthly living expenses and your outstanding debts. A situation like this could make budgeting difficult.

However, if you don’t try living on a budget you are making the decision to continue the cycle of living paycheck-to-paycheck. Creating a budget could actually provide you with a plan for not only spending, but saving, money. This can give you peace of mind. If you struggle with overspending, learning to live on a budget could help reduce the guilt you feel when you spend money.

Committing to a budget and sticking to it can be one of best things you can do to improve your financial situation and grow your net worth over time.

Stop Using Debt to Pay Your Bills

Of course, it is possible to use credit cards responsibly. But, getting ahead of your debt when you continue to use credit cards can be challenging and even derail your progress. Some people will tell you to cut and throw away your credit cards.

This may not be an unrealistic choice for you. Here are some things you could try that will make using credit or credit cards more difficult:

• Store your cards someplace less accessible than your wallet.
• Ask your friend or loved one to keep your cards safe for you.
• Request that your credit card company freeze your account (you can always  “unfreeze” it at any time).
• Have the credit bureaus freeze your credit. By doing this, it will make it more difficult to open new credit accounts, and again you can unfreeze them at any time.

Remember, when you are using a portion of your monthly income to pay off debt and then you turn right around and use your credit cards to incur more debt, you are keeping yourself from achieving financial freedom.

Try to Decrease Your Expenses

Reducing your expenses can be difficult especially if you are already living below your means. The line between what you “want” and what you “need” can become easily blurred. If you are trying to pay off your debt, a sizable part of your income is more than likely reserved for debt payments each month.

If you can decrease your expenses that will free up more of your income to put towards your debt which will allow you to make a bigger dent in the debt.

Expenses such as subscriptions, eating out, entertainment and even groceries can be cut drastically. However, expenses such as your rent or mortgage, car payments and insurance and utilities are normally “fixed” and in many cases cannot be reduced with more effort, but here are some suggestions:

• Contact your insurance company and request a policy review to see if there are any opportunities to lower your rate.
• Change cell phone carriers or plans. With the cellular market being highly competitive, you may be able to switch plans or carriers to reduce your monthly expenses.
• Groceries and dining out are one of the largest expenses for a family. Track your food costs for a month and record every dollar you spend at the grocery store. Include take-out food, restaurants and your trips to the coffee shop. Once you see what you are spending your money on, you can take some steps to reduce your grocery expenses.

Be Accountable

The journey to being debt free can be a lengthy process. If you have someone to help hold you accountable and encourage you this could be crucial for your success. Remember, you don’t have to do this alone.

If you are married or in a committed relationship where finances are being combined, your partner and you should work together. Combining your efforts will make you more successful than going it alone.

If you don’t have someone to partner with, you may want to talk to a family member or close friend, someone who can help hold you accountable. The ideal partner is:

• Someone you feel comfortable sharing your situation with and trust.
• Someone who will have your best interest at heart.
• Someone who is in a better financial situation.
• Someone who will hold you accountable if you are making bad financial decisions.

Make sure you know why you are trying to get out of debt, then let your accountability partner know those reasons. Check in with your partner periodically and share your progress with them. And, if you are feeling discouraged, reach out to them for advice.

Take a Side Job

All of the tips above can help you become debt-free more quickly, but if you are increasing your income at the same time, you could put yourself on a faster track to financial freedom.

Consider a part-time job. Pick your hobby and turn it into a side hustle to add to your income stream. Figure out what you like to do and see if you can monetize it. Do you like to bake? Offer to bake for your friends. Love photography. Offer amateur sessions seasonally to friends through your social media pages. Like to write? See if any area businesses need help with blogs and freelance. There are lots of ways to earn extra cash on the side.

What’s Next?

If you are plagued with overwhelming debt and you’ve tried the tips above with no success, it may be time to speak with an experienced bankruptcy attorney about your options.

Contact Leslie Craft with Craft Law Offices for your free consultation. Leslie will provide you with personalized, responsive legal representation and help you get the financial relief you need to move forward. Don’t spend another day worrying about how you will pay your bills, contact Leslie today.