At some point in our lives we have all had to pay back loans or credit cards.
Initially these payments don't seem so bad because the repayments are normally low in the beginning.
As time goes on we think it's OK I'll just charge it, we do a quick sum in our heads and convince ourselves we can afford it.
Do this often enough and before you know it you taking out loans to pay for loans.
We accept free credit cards that are mailed to us and begin using them, sometimes without reading the fine print regarding the interest charges.
There are steps you can take to help yourself to avoid getting blacklisted or marked as a bad payer.
If the accounts you have are killing your budget every month, and you can barely make ends meet consider approaching a debt counsellor.
They can negotiate the terms of your debt agreements with your lenders.
Possibly consolidate your debts into a single account to help lessen the burden.
But as with everything in life these services are not normally free and may have a fee attached.
Remember though, that this could save you a lot of distress if you are over in debted.
If you are in debt but have a little extra spending money after your payments, consider paying a little extra into your chosen debt.
A little can go a long way in reducing interest charges over the agreed term.
The term debt snowball implies you select an account that is usually the most expensive i.
e.
highest interest charges, and start eliminating it with your extra funds.
Most people get disheartened though, when they cannot see results and stop paying the highest debt down.
If you're like me and want to see a difference choose the lowest balance and settle that as fast as you can.
You feel like you have accomplished the impossible, and this will motivate you even more.
Then take that minimum payment together with your extra payment and tackle the next debt on your list.
Cancel unnecessary subscriptions, have a yard sale, trade in your vehicle for a cheaper one, these are some options.
Possibly get additional sources of income doing freelance work if time allows.
Another option (but can be dangerous) is to consolidate all your high interest debt into your housing finance.
The reason that this is dangerous to undisciplined people is that once all the debt is consolidated.
It will free up additional funds which could then be used to incur more debt.
Only consolidate debt if you are strong enough to resist the temptation of applying for more credit.
The best way to stay out of debt is to stop spending on credit, live below your means (spend less than you earn) and start investing for the future.
Setup an emergency fund for those unexpected moments in life, so you avoid using the credit card or family savings.