Make a list of all your sources of income. Include every way you earn money, whether it’s from your job, investments, interest income, etc. Tally your various income streams by month. Make another list of your monthly expenses. Be sure to include everything you pay for every month, including utilities, groceries, gas, eating out, tuition, etc. Tally these expenses by month as well. Subtract your monthly expenses from your monthly income. If you have more income than expenses (and that should be the case), then the remainder is your discretionary income and can be used for debt relief or savings. Every month, be sure to stay within your budget. If you go outside of your budget, you’ll have less money for debt relief or savings.
Are you eating out too much? Save money by cooking your own food. [7] X Expert Source Benjamin PackardFinancial Advisor Expert Interview. 11 March 2020. Can you reduce your utility bill with a more efficient use of energy? For example, does the downstairs area really need to be air conditioned while everybody is sleeping upstairs at night? Are there electrical devices left on all the time that shouldn’t be? Consider extreme couponing to save money on your groceries. [8] X Research source
Be advised that this option will adversely affect your credit score. It will show up like a seriously delinquent payment or charged-off credit card debt.
Consult with a professional bankruptcy attorney about this option. Keep in mind that you’ll have a black mark on your credit report for about 7 years if you go this route.
