Was your 2019 resolution to get out of debt?
You may be reading this question and rolling your eyes, what do attorneys know about being in debt. How can they possibly understand where I am coming from? They don’t know how hard it is. But we do, we do understand.
Our founder, Ari Witkes Esq., graduated with $70,000 in debt and climbing higher every day due to unforgiving interest. Through vigorous budgeting, strong discipline, comprehensive payment plans, and tough negotiation, he managed to pay his entire debt down in just over two years. If Ari could dig himself out of $70,000 dollars of debt, you certainly can as well. No debt is insurmountable!
Here are 10 things you can start doing today, that will get you out of debt tomorrow.
1. Reach out to the Creditor: Communication! Your first step is to contact the current steward of your debt – whether it’s the creditor, a collection agency, or an attorney. Tell them that you want to resolve the debt and make a game plan with them. We know when you get that bill in the mail or a debt collection phone call, your brain is going to want to shut off. Its natural to be a conflict avoider. The problem is, if you don’t attack it head on it will only get worse. Do not run away from debt. If you try to avoid your debt, not only will it grow with interest over time, but you will likely be pulled into unnecessary legal and credit issues.
2. Understand your Finances: Keep a detailed tracking of your monthly expenses, and your monthly income. Subtract your total expenses from your total income to see if you have a surplus or a deficit. A surplus means you have money left over to pay down your debt, a deficit means you are spending more money then you have. From now on you only spend money you have. It might take some tough decisions, discipline and building a side hustle to bring in more money.
3. Create a weekly/monthly budget: Outline all the things that you need to pay for each month: rent, groceries, gas, utilities etc. Allocate income to each category. Do not go over budget unless there is an emergency! A great resource for budgeting is: mint.com
4. Put all extra cash toward paying down your debt: Putting any extra cash or unexpected money toward debt will speed up your debt payoff. It will reduce interest and help you pay off the principal. It can be extremely tempting to go out and celebrate with a gift, bonus, or tax refund, especially if you’ve been adhering to a tight budget for a while. But if you are really committed to making progress on your debt you have to stay focused.
5. Consistently pay more than the minimum payment: This is a difficult one, we know. But whether we’re talking credit card debt, personal loans, medical debt, or student loans, one of the best ways to pay it down sooner is to make more than the minimum payment per month. Doing so will help you save a lot in the long run on climbing interest and will also considerably speed up the process.
6. Cut all financial excesses:
Are you paying 100$ a month for cable? What century are you living in? Every single show that you like is online on about a thousand different websites. Cut the cable. Stream online.
Are you driving a BMW when you really should be driving a Honda? Sell the BMW. Get yourself a smaller, fuel efficient, cheap car. When you pay off your debt, and are more financially stable, you can revisit the idea of driving a BMW. You know what's cooler than driving a fancy car? Being debt-free. Trust us.
Break up with Starbucks, get yourself a coffee maker. I promise your barista will get over you.
Are you Smoking or Drinking? Not only will quitting them make you a healthier individual, it will also save you a lot of money. Get to it.
7. Take advantage of the online sharing economy: Sell things that you don’t need. The sharing economy has truly opened new doors for those of us that are in debt. Use it to you advantage. Create an Ebay, Craigslist, and Amazon account, and sell the things around your house that you don’t use anymore. Go through your belongings from top to bottom and sell the things you haven't touched in years. You’ll be surprised how much the phrase ‘one man's trash is another man's treasure’ is true.
8. Start a side hustle: Get a part time job. If you find yourself with extra energy on weekends, drive for UBER, Lyft, UBEReats or start a babysitting service. Do you know how to play an instrument? Teach children how to enjoy music the way you do. Coach a sports league. Do you have a car? Rent your car out on weekends when you don’t need it to get to work. Do you have an extra bedroom? Rent it out on AirBnB, or better yet, get a roommate! Get out there and get another income stream.
9. Make smarter purchasing decisions: Say it with me, “Coupons are my friend.” Do not buy in store because you just got your paycheck and you’re feeling impulsive. First check online for coupons, cash back rebates or a cheaper equivalent of the product online. If you find the same product cheaper online, sometimes the store will price match for you, don’t be afraid to ask. If they don’t then walk away and buy the equivalent cheaper product online later when you get home. Check out: ebates.com
10. Step it up in your career: This is probably the most important one. Come to work early, stay late. Bring in as much value as possible and do so on a consistent basis. After a few months of raising the bar professionally- ask your boss for a raise. You miss 100% of the shots you don’t take. Make yourself invaluable, then negotiate hard.
Don’t allow 2019 to add to your debt, now is the perfect time to turn your finances around. We hope this information provided you with some valuable courses of action to make significant progress on your debt. Here at Witkes Law Firm, we strongly urge debtors to engage with and resolve their accounts before the legal process gets too involved. WLF prides itself upon our ability to work with every individual debtor to reach a solution that satisfies their creditors and puts them on a path toward financial stability. Reach out to our team to see how we can help you.