We focus a lot on using debt consolidation loans or low-interest credit cards to get out of debt, but what are you supposed to do when they are not an option?
How can you get out of debt if you are merely left with a pile of bills and an income that does not seem to be able to cover your costs?
There is still no need to panic, as we have a few simple steps to help you recover.
This is going to sound crazy, but the very first thing you need to do is save some money.
It does not matter if you have to go out and get a part time job or sell a few things you do not need, but get some money in the bank.
If you can manage to put away £500, it will be a nice rainy day fund just in case something happens to you down the road
In the meantime, continue to pay off your minimum balances.
There is a technique called the “Debt Snowball” that is a great model to pay down your debt. Get all of your credit cards together and add up the total for all of your minimum payments.
Add £20 to the total (or whatever you can put together each month, more is always better), and pay off the card with the smallest balance first.
When that card is paid off, fold the money you were paying into the next card in line
This is obviously where the name “snowball” comes into play as gradually, the payments you are making on cards continues to grow until you are down to your last card.
The balances will begin to drop dramatically and you will have them paid off in no time at all.
The challenge is in avoiding the trap of spending some of what appears to be extra money. You will need to stay disciplined if this method is going to work for you.