Eliminate Debt Being A Single Mother
Being a single mom, are you afraid of your debts and want to get rid of them permanently?
I bet most of the single moms in our nation would say “yes”!
Being a single mother, taking care of your kids and paying off debt isn’t an easy job to do. If you have a good credit score along with your debt, you’re lucky to have some added benefits. But the entire debt system might make it hard for you to keep your credit score high. However, if you get the right resources and acquire proper knowledge, you can get out of these debts easily and quickly.
Check out these unique tips to eliminate debt being a single mother.
1) Set up your “Debt” Office:
Collect all of your bills, a notepad, a pencil, a calculator, and your checkbook.
You may also arrange a file or an old binder and use it to gather the documents. Gather statements for every debt like credit cards, medical bills, utility bills, mortgage, home equity line of credit, personal loans, etc.
Check out all your bills, and pay the ones that are due within the next week. Contact your creditors and ask them to set up a payment plan if you can’t make all the payments. Many lenders will be willing to work with you so that you can divide your paycheck and make bill payments in different dates.
Also, sort out your unpaid debts and their rate of interest by making a list.
2) Review your Credit Report:
Get your free credit score from freecreditscore.com. You should also check the validation of your debts, so take a look at your credit report.
Every people in our country owns the right to dispute errors on their credit report. It might happen that your credit score is getting damaged due to some old debts that have been already paid off but still showing in your credit report as unpaid. Apart from those wrong entries, you might find few legitimate debts that are added several times or bankruptcies that are not yours. Dispute them all at once.
You must remember that your credit report and your credit score aren’t the same. There are some differences between a credit report and a credit score. If you are strapped for time and patience, it can be worth the investment to pay a reputable credit repair company to take over this task for you.
3) Start Budgeting:
Create a monthly budget and check out how much you can afford to pay towards your debt. Don’t forget to assess your income. Calculate how much money you are saving after paying off your bills.
Prepare a payment calendar and you can set up automatic payments per month for paying off your credit card debt and other bills. By this way, you won’t have to worry about the minimum payment or late fees.
Limit any extra spending and lower your luxuries. Basically, overspending is the sole reason for being in debt. So, as much as you can avoid it, the better.
For example – If you have little kids, you can cut back food cost into half by getting them food at cheaper restaurants. You can skip your order if you want to. Normally, kids can’t finish off their food completely, especially when they’re having fun. So, you may save by eating the leftover of your kids.
4) Increase your Net Worth:
Determine your net worth. You can describe the ‘Net Worth’ mathematically this way:
(What you own – What you owe) = Your net worth.
So, you may calculate your net worth by adding all your investments, the home equity, and any other assets you have and then subtract your debts from there. You’ll get your net worth. It is similar to subtracting your liabilities from your assets, just the way people do it in their business balance sheet.
5) Look out for Low Credit Card and Loan Rates:
If you have a good credit score, you might apply for credit cards with lower interest rates. Similarly, you can refinance your personal loan, mortgage loan, or any other loan with a lower interest rate.
You can opt for the balance transfer method to consolidate credit card debts. But don’t forget to read the fine print before applying for the card. Make sure you repay the entire balance on your card within the introductory 0% or low rate period; otherwise, you’ll have to pay quite a high interest on the remaining balance.
6) Increase your Income:
Try to increase your income. If you manage someone to look after your kids, like family or friends, you might be able to get a second job.
If possible, find a late night job, when your children are asleep. If you don’t have such luck, try work-from-home jobs. You may also make some money by taking care of others’ kids at your home like a kindergarten.
7) Choose a Proper Debt Repayment Plan:
Check out 7 popular debt payment methods:
- Debt Snowflake
- Debt Snowball
- Debt Avalanche
- Personal Loan
- Balance Transfer
- Debt Settlement
There are two prime DIY methods for paying off debt.
Debt Snowball – This is the method of paying off your credit cards or other loans starting from the smallest balance. By following this method, you can pay off your debts successfully within a shorter time frame. But this method is expensive as it ignores the cost of high interest.
Debt Avalanche – This method eliminates debts starting from the highest interest rate. This method is quite popular as it is less expensive than the other debt repayment methods.
As per your financial situation, choose any DIY method you want.
8) Contact an Expert:
If it is getting difficult for you to follow all the above ways, do not worry! It’s quite normal. The process of getting out of debt misery isn’t easy. So, if you like, any point of time you can seek help from an industry expert or debt attorney. You can also contact a consolidation company who can provide you with credit counseling service and consolidate your debts into a single monthly payment with a lower interest rate.
You can check out here:
- National Foundation for Credit Counseling
- Association of Independent Consumer Credit Counseling Agencies
Being a single mom you surely have lots of responsibilities. But you shouldn’t ignore the chances of getting debt relief. So, you can follow these tips. It might take time to consolidate credit card debts, pay off your medical bills, or eliminate your student loan. So, don’t lose hope; it is quite possible to eliminate debt by being a single mother.