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How to Reduce Credit Card Debt

remove credit card debtAccording to a recent estimate from NerdWallet.com, the average American is living beneath the weight of around $7,000 worth of credit card debt. A lot of people have a list of reasons when asked how their financial trouble has developed, and all seem to think that the road ahead is bleak. But getting out of credit card debt isn’t nearly as hard as it sounds. Sure, it’s a lot harder than getting into debt in the first place, but that doesn’t mean it’s impossible. It’s certainly worth your time to follow these easy steps, and it could end up saving you hundreds or even thousands of dollars.

Create A Budget:

Anyone who has been in debt can tell you the first major step you need to take is creating a budget. You can go the fancy route and use an online service, like Mint.com to keep track of your monthly income and expenses, or you can use pen and paper to write out the list yourself. Using whichever method you prefer, you can easily see if you’re spending more than you’re bringing in. If the answer is yes, you may be in a dire situation. If you don’t scale back your spending immediately, you’re going to dig yourself into a deeper hole. Simply review your expenses and see where you can afford to cut costs.

Reduce Your Monthly Bills:

Not all of your regular monthly expenses are set in stone. Sometimes it’s as simple as buying fewer name brand products, but often there is more that you can do. If you have subscriptions for monthly products or services, can you put any of them on hold or cancel them completely? Are you paying for more movie and TV channels than you’re ever going to use? Can you get a cheaper data plan for your smartphone, or even switch to a cheaper phone company? Can you reduce your home energy expenses? Maybe take shorter showers and make sure that you don’t always fall asleep with the TV on. All it takes is a quick review of your statements and subscriptions, as there are generally a number of money-saving opportunities when it comes to your regular monthly services.

Cut Down On Unnecessary Purchases:

We’re not saying you have to live on the bare minimum, but try cutting down on weekly purchases that you just don’t need. By tracking your expenditures for a week, you can get an idea of how much you spend on minor, everyday purchases. Cutting back or eliminating discretionary expenses can have a big impact on your bottom line. Try making your own coffee instead of getting Starbucks every morning; or limit your outside dining to half of what you’re currently spending. Try to eliminate things like expensive salon appointment entirely.

Rethink Entertainment:

Going out can add up to a lot more money than you realize. Having dinner out several times a week, trips to the movies, bars, and other such entertainment venues are costly, and for those facing a mound of credit card debt, these expenses are unnecessary. Start off by trying to replace one entertainment outing per month with something a little more fiscally prudent. Replace that fancy restaurant dinner with a home cooked meal. Have some of your friends get in on it, and make it a monthly ritual. Instead of going to the movies, check out Redbox. If you’re paying for you and a friend to get movie tickets, refreshments, and concessions, you could easily stand to save $40 per trip.

Reward Yourself Along The Way:

Getting out of debt is a lot like trying to lose weight. It’s easy to get to the point where you need to do it, and harder to get back to where you started. And like losing weight, you need to keep at it to make progress. If you make getting out of debt a chore, it’ll make it harder for you to keep taking the right steps, and you’ll often notice yourself backsliding. You’ve got to keep yourself motivated. Instead of making it all about guilt and sacrifice, create goals and milestones to better measure your progress. For example, say you want to cut your debt in half, from $10,000 to $5,000, in two months. If you reach your goal, give yourself more than a meager pat on the back. Reward yourself with a movie you wanted to see, or maybe bring back one of the monthly expenses you’ve cut out. But always do so within reason. Remember why you’ve been working so hard and what it feels like to see that debt shrinking away.

Many people have been racking up credit card debt; you’re not alone. It’s what you do to relieve yourself of the stress of that debt that’s important. The first step is always to look your tormentor in the eye and make a commitment to yourself to be rid of it. You can do it. All you need to do is start.

Disclaimer: Attorney Advertisement. This article has been reviewed and approved by Thomas A. Moore, managing attorney Brownstone Law Group, PC. California Bar #148698. This article is for informational purposes only, does not provide legal or tax advice of any kind or form any type of attorney/client relationship. This article was published on 5/23/16.

 

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Brownstone Law Group – San Diego
Our San Diego law office offers convenient appointments, call us at (619) 485-3045.
2534 State St #417
San Diego
CA
92101
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