There is nothing worse than feeling trapped because of issues with money. Debt is not a joke, but it does feel like you’re close to hysteria when the debt walls are closing in. Money is what makes the world go around, but it also makes life unbearable when you can’t get an even footing on your budget. Those who have never had to deal with being in debt often don’t understand how difficult it can be to owe money to one or more creditors. It’s not easy to live a life feeling on edge, and that’s exactly how you feel when you have been in debt for a while. The phone rings and it’s a debt collector. You get letters through the door marked with red stamps and you hide when the doorbell rings because it’s a debt collector coming to discuss the debt.
Debt can have a serious impact on your mental health, leaving you feeling stressed out, worried, scared of the future and unable to see a light at the end of the debt tunnel. It’s not easy to manage – and yet here you are, trying to learn how to get out of debt and back into the black.
Debt can have a severe impact on your quality of life, but it doesn’t have to be this way. You can work to get rid of the ball and chain of debt that is dragging you down, and it doesn’t have to be as bad as you think. You can climb out of this hole, and we’ve got all the tips that you need to do it. One foot in front of the other is all you need to climb up out of the debt that’s pulling you down – let’s take a look.
Start With A Plan
You can’t hope to do anything about your debt if you don’t plan to get out of it. You can plan your budget all you like, but the very first baby step that you take has to be in acknowledging the debt and believe that you can get out of it. Your Google search history may be asking how you can apply for an IVA and how you can start a debt management plan, but none of those things will help you if you can’t admit that there is a problem to yourself. You need a plan and once you take a breath and acknowledge how deep into debt you are, you can start writing one. It takes a lot of planning and commitment to get out of debt, but it also takes a certain strength to do it. You know that this is a difficult place to be and admitting that there is a problem is brave of you. You can choose to avalanche your debt by paying off the debt with the highest interest rate first, or you can go lower with the snowball method and pay the little debts first. Either way, you need to start chipping away at it all.
Say No To More Borrowing
It’s tempting to whip out the credit card and pay for something you want when your current account says no, but it’s time to stop doing that. Even one purchase on a credit card is borrowing money, and the more you do that, the more debt you dig yourself into. That “just one purchase” turns into several hundreds in debt, and the only time that you should ever be borrowing money is if you have no other choice and it’s detrimental to your health and life not to. If your debts are growing, you need to slow them down if you are hoping to get out of debt. Unless you absolutely need to use your overdraft and credit card keep them hidden away. Your debt will continue to grow otherwise, causing more issues than you need to handle.
Make Your Debt Cheaper
Borrowing money on your credit card or overdraft causes daily fees and the interest and fees can cost more than the debt itself. Paying out high rates means that you are paying more in interest payments and very little on the money you actually owe. If you have a good credit score you’re going to do better switching to a 0% interest credit card. If you transfer the balance over to your 0% interest card, you can better manage the balance without the interest piling on top of you. This is a cheaper way to manage your debt without your owing gets completely out of control. If your credit card debt is getting out of control, this is the best way to get out of it and if your credit score is a low one, then the more attractive option can be a debt consolidation loan. The problem with this one is that you have to borrow more – which is what you’re trying to avoid. However, this is one of the loans that you really shouldn’t mind taking. There are plenty of soft searches that will tell you if you will be accepted for it.
Balance Your Spending
How much money are you spending on the “unnecessary” items in your life? Do you really need to buy a Starbucks coffee everyday? Do you really need to go to the supermarket four other times outside your weekly shopping? If this is the case, it’s time to stop shopping the way that you are and start better balancing your spending. You need to make a list of all the things that you spend on in the month, and then you need to tick the important things that you have to buy and score out the things you don’t have to pay money on. Cutting back on unnecessary spending is a must if you want to pay down your debt and actually get on with getting your debt levels down.
Learn to Better Budget
The more money you put towards your debt, the better off you will be. You have to consider your debt as important as your rent and your utilities, and if you include it in your budget as importantly as the rest of it all, you can start seeing it as a way to get rid of the debt. Budgeting your money properly should include debt as a must-spend, not as an afterthought to your disposable income. When you are paying out the debt, you can learn to pay for it as you would anything else.
Where You Can, Pay More
You need to look at your disposable income after you have paid your initial debts, and then you need to work on adding more to the debt. Sure, you’ll be left with less to spend on the fun stuff, but the faster you pay off your debts, the faster the fun stuff will be a reality again. The thing is, you need to pay off the loans and debts fast to avoid more interest being piled on top. The less you have to pay off in the long run, the better for you it will be.
Use Your Savings
If you have built up your savings and you have a specific thing in mind: a holiday or a new car, for example, you need to put that on the backburner. When you have enough savings for a rainy day and you’re able to save but struggling to pay debt, you’re not being sensible with your money. Use your savings to clear as much of your debt as possible, and you can then save again when your debt is in the clear. There is no need to keep building up a savings pod when you have debt to pay off. Let the savings go and watch your debt levels go down, and you can then save when you are free of your debt at last!
Talk To Creditors
Believe it or not, creditors are not going to eat you if you call them. It’s not scary to admit it out loud that you have debt to the person trying to collect it from you: they already know. You can come to an arrangement with your creditors and it starts with a discussion about what you can afford to pay, and it goes from there. A conversation about what you can reasonably afford is a must with each of your creditors, and make sure that you don’t push yourself beyond what you can afford. All this will equal is more debt, more issues and more worry – and you should never promise creditors something that you know you can’t afford. The only thing that this will do is get you into trouble.
Seek help with your debt and don’t be afraid to reach out to anyone. This debt doesn’t have to rule your life and you do not have to worry yourself over it for any longer than you already have. Debt is something that can be combated and controlled, so start with these tips and go from there – you’d be surprised at how well you will do with it!