Assess Your Situation
Realistically evaluate your income and spending. To
get out of debt, you must understand what you spend
your money on and how you got into debt in the first
place. Knowledge is power; once you understand how you
got where you are, you can take steps to resolve your
debt issues.
- Figure out how much you owe
- Debt to Income Ratio
- Calculate your spending: You need to know where
your money is going. Write down every penny that you
spend every day and what you bought with that money.
Keep track of your spending for at least two months
to best evaluate your spending habits. Then, look
at ways to reduce spending, especially on goods or
services that you don’t really need and can live without.
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