In life there are many personal goals that we want to achieve. Buying a home, getting married, having children may be many of the milestones you are looking forward to. Coincidently, all of these lifetime goals all require money – a lot of money. While it may be that you have been saving for these goals for many years – it also may be the case that you require loans to help fund these aspirations.
However, what happens when you have bad credit and all of those loan opportunities are unobtainable for you? While this may not be the case for all loans, as there are many more lenders that offer bad credit loans to individuals with lower credit scores – with the understanding that they still require loans regardless of this situation.
This gives more hope to the reality that you can still achieve your personal financial goals, reduce your debt - even if you have bad credit. With that being said, there are ways you can make things easier on yourself and to get you one step closer to your important milestones. Here are 3 strategies to help you relieve your debt load as well as rebuild your credit.
1. Organize Your Finances (Budget)
This first step will include taking the time to organize your finances, starting with your current budget and your important financial documents. Reviewing your budget, your credit card information, bank statements, and other loan agreements can help you get organized with how you will go about getting ready to make some important financial adjustments. Here you may also identify any features of your loan agreements that you have overlooked or mis-managed in the past to contribute to your financial issues.
Reviewing your current budget will also allow you to see where all of your money has gone in the previous few months and the entire year as well. This should help you see all of your expenses and your money coming in. Have you been spending more then you are earning? This is an important realization to take note of here before you move forward with the next stage.
2. Adjust Your Spending (Monitor Your Spending & Saving)
Since you have already taken steps to observe where your money has been going over the course of the previous year, this is a good time to monitor your spending behaviours over the next little while and see what other spending leaks you can plug up and improve. This part of the process will help you to get a jump start with responsible spending habits and even make it feasible for you to start saving some additional income.
Overall, by being a smarter shopper for daily shopping necessities you can cut back on your expenses and hopefully even out your income-expense balance sheet more consistently.
3. Reduce Your Debt (Debt Repayment Strategies)
You can also take this time to once again review your current debt and then begin to make a plan that makes the most sense for paying it off. Since you have already looked at how you can cut down on some of your daily expenses, you then need to tackle the bigger expenses – your debt. Here is a list of steps to consider when moving forward with this debt reduction plan.
• Prioritize your debt: Which is the debt you will pay off first? Choosing the debt with the higher interest is a helpful first strategy to consider.
• Stop using your credit cards for a period of time, if possible to allow for a chance to catch up on your payments.
• Consolidate your loans into a low interest low to help pay them down faster and more effectively.
Of course there are many more options for reducing your debt, but creating a plan to get started is the key to moving forward with this process. You could also consider speaking with a debt-reduction specialist to gain some more insight into which repayment strategy may be the most effective for you current financial situation and your specific kind of debt.
In the end you can achieve your personal goals even with bad debt. By beginning to rebuild your credit and reducing your debt, you can move closer to these important goals from a more sound financial position. There will always be expenses that can hold us back from obtaining our future goals. However, by being dedicated to improving your finances, lowering your debts one by one – you can get there. Don’t allow bad credit to make you give up on your dreams. Keeping planning, keep moving forward, bad credit and all.
