Things to Do When You’re Deep in Debt | Debt
Create a bare-bones budget.
This is as much fun as it sounds. Still, it should be effective.
“One key strategy is to cut back to a bare-bones budget, which frees up more funds to devote to paying down debt. That means a budget focused on just the basics – housing, food, utilities, transportation and bills. Eliminate all discretionary spending, such as entertainment, travel, clothing and gifts,” says Amy Maliga, a financial educator with Phoenix-based Take Charge America, a nonprofit financial counseling agency.
And within those basics, Maliga advises that you are as “economical as possible.”
“Prepare all meals at home, keep a close eye on when and how you use water and electricity, and try to negotiate lower rates for essential services such as insurance. If you start feeling discouraged, remember, your bare-bones lifestyle won’t last forever,” she says.