Paying off Debt When You’re Broke : Ok, so you’re broke, busted, dusted – you just plain aren’t got any money. However, what you do have is a metric ton of bills. Being faced with paying off debt when you’re broke can be a real conundrum. However, it’s usually just a matter of readjusting your thinking. Instead of focusing on what you don’t have, take a look at what you do have and figure out how to apply it to solve your problem.
Create a Spending Plan
It’s hard to see exactly what you have if you don’t write it down on paper (or put it on a screen as the case may be). Crafting a spending plan will let you take stock of what you have coming in and what you need to have going out, so you can assemble a plan of action. Looking at it in your head, you might miss an opportunity. Worst case scenario, you’ll see exactly how much more you need, which will make developing a strategy to get it that much easier.
Cut Your Spending
So many people who think they’re broke keep spending as if they aren’t. Another benefit of creating a spending plan is you’ll see why you need to chill. You’ll also have something against which you can measure the benefit of being more conservative with your expenditures.
By the way, cutting your spending includes cutting up all of your credit cards — except one. You’ll also need to go to your online stores and delete account numbers so you won’t be able to shop without thinking about it. Keep one card for emergencies, but don’t pull it out unless you absolutely must. And no, a fifty percent off sale at Barney’s does not constitute an absolute must.
Negotiate with Your Creditors
If you are really, seriously broke, contact your creditors. Let them know things are about to take a turn for the worst and ask for some leniency.
Sometimes they’ll lower your interest rates and even waive certain fees if it will keep you paying. Working with a partner like Freedom Debt Relief can even help you negotiate down your principal balances, so you’re able to zero them out for less.
Get a Side Hustle
A basic fact of life for folks in the middle these days is a single income simply isn’t enough anymore. The price of everything keeps going up — well, except our labor. Wages have stagnated even while costs have escalated. This means you’re going to have to bring in something on the side to help you keep up.
Find something you like to do and figure out a way to get people to pay you to do it. Love animals? Get a dog-walking gig. Like to write? Pick up some extra cash doing resumes. Whatever it is, use the cash you make to pay down your debts. And, who knows? You might even start your own business out of it.
Ask for Help
Depending upon the nature of your situation, there are government programs, charities and other entities out there willing to help you get through a tough time.
Hospitals will negotiate medical bills if that’s the source of your woes. Church groups often have funds to help people who are in financial trouble. Whatever you do, make sure you give back once your problems are solved. This will help others who are going to experience the difficulties you have right now.
Paying off debt when you’re broke is doable. However, you’ll have to make an effort to assess your situation, change your habits, take on some additional work and do your best to maintain a positive attitude.
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Paying off Debt When You’re Broke
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