Piling on debts can undermine your financial morals and conveniently derail your life plans. Debt is a quicksand process before you realize it you steep in deep. We all know unresolved debts are a serious call for help!
Owing money can be very overwhelming. Credit card debts, auto debts, other business debts all of such categories can turn into a challenging burden for you if you do not sketch a careful plan about how you would be dealing with such problems in the long run. Before you know what has struck you, that plastic card of yours is already hitting you with piles of interest payment build-ups.
‘’But hey! My student loan investment was a good debt’’. That is true, the money you borrow for financing a good cause is known as good debt; home mortgages and getting a loan for college degrees are all good debts, yes. However, you might not feel comforted knowing that regardless of what you pull out of the string, it still comes from the same thread and for you that is D.E.B.T.
Even if it feels harmless today, tomorrow managing your situation would become an exhausting headache. If you want to avoid such situations arising or you are already drowning in heavy debts, we encourage you to continue reading this guide. We want to ensure that we help you direct your money ways in the best ways possible.
UNDERSTANDING YOUR SITUATION- SO HOW BAD YOUR DEBT IS?
Before you can go anywhere, there are certainly important questions you should ask yourself. ‘so what is my current financial look’, ‘How bad my debt is’, ‘what are my options to make a way for debt through my expenses and savings’. This will allow your mind to figure out ways for and roughly sketch an outline of how your financial roadmap is going to look like after you decide to pay off your debt.
For starters check on whether your debt is bigger than annual pay plus tax.
Our tip: grab a pencil and paper and write down all of your necessary expenses, what can you cut down, expenses which you can squeeze out of your expenses list for some time if you have any savings how can you use that to save yourself from debt. All of these points are important to consider whenever you are headed towards your debt-free journey.
JOIN DEBT FREE GROUP!
First’s thing first, never borrow more money to get out of your pending money. This will only create an ongoing cycle of situations and problems for you. In most situations people taking loans for repaying the existing debt end up paying interest money more than the original loan buildup.
In case you have no other option than borrowing cash. Lookup for cheap loan providers. With cheap loans, you would have a small interest rate and this way you would be able to tackle your loans in an efficient way.
Stay motivated throughout your journey. Be realistic with your money goals. Chances are you would be tempted to give yourself some soft edge financially every now and then once you start paying the debt. So make up your mind and start from today.
THE DEBT FREE AGENDA CHECKLIST
- REDUCE YOUR OUTGOING COST
Like we said about writing down your income and your budget. Why is this important as in most cases people have their income the only source of money they can use to pay off their debts? If you are afraid that budget planning does not work for you, then there are several free budget planners online.
TIP: always start with the smallest buck you can manage, let’s say $20 or $50 would do. The most important step is to start paying your debts off.
- GIVE IN YOUR SAVINGS
Unfortunately, those savings would bring you no relief if you would not be able to manage your debt money. We know how hard is it to give in your savings money which you have been saving for your dream car. But believe us when we say this if you are not able to manage your money profile today, there is a fair chance of losing a lot in the process, including your peace of mind.
- CHECK ON YOUR FINANCIAL BENEFITS
At times we are unaware of the benefits we receive from the state. This can come off as a great help in crediting yourself with some extra money. There are online portals where you can check on your benefits for free.
- RECLAIM
It is often very usual to have some fees and charges on your debt policies which you can easily reclaim. If you have set a decided limit on your credit card, you can reclaim the money which has gone off that limit. It is also possible that you can fall into certain job categories or citizen policies where you have the advantage of reclaiming a certain amount on your debt money.
Apart from considering some important aspects, you would definitely need to cut down on
some of your costs. Here are some points to consider;
- Give a check on your credit card fees. Make sure there isn’t any hidden duff credit holding you back.
2. Try shifting your debt on cheaper credit cards. This way you would be ensuring that the loan buildup is lesser than before. It might not be the ultimate solution but it will surely help you through.
3. Look for grants and support. If you are a customer of a reliable company, you may want to check if your company can help you get through the financial burden.
4. Try having a talk with the lender. Before the debt avalanche drops on your head, we recommend you to talk to your lender. You never know you might find a way out of your situation or some kind of relief.
5. Maybe you can get some help from the government. the government often offers various ways such as allowing you to borrow interest-free money. They have various other ways and schemes which you might want to look into such as;
- The government-run council groups
- Interest-free loans and advances
- IVA and DRO schemes (please read up on it separately)
DEBIT/ CREDIT COUNSELING
If you keep on falling in the same wheel after trying everything you could, then it would the best time to get started with Debt counseling. Make sure you are walking towards the right people. At times there are people who will provide guidance yet it would not be related to your problem. Moreover, given how people face debt crisis, most councilors would try their level best to make money out of you.
To avoid more hassle, make sure you are getting help from someone who is an expert and is renowned for dealing with debt problems. You can access for one to one sessions, where you are openly talking about your individual problems.
A serious non-profit counseling help center will help you get an agreement that will involve the government and the credit service association. Through this agreement, you would be ensured that no loan collector is to contact you before a 30-day time period, provided you are showing willingness to seek help and working towards repaying your debts. Here are some centers you should consider for reliable credit counseling.
- StepChange Debt Charity
- Citizens advice
- National Debtline
- Civil Legal Advice
- PayPlan
- Christians Against Poverty
- Money Advice Centre
- Community Money Advice
- Debt Support Trust
- Business DebtLine
What do they do?
- Negotiate with your loan lenders to shave off your interest
- Help you get started on a debt management plan
- Direct you towards fruitful schemes like IVA (individual voluntary arrangement)
One important you should be mindful of is that you are not alone. There are online communities built by people who have faced similar challenges. These support platforms are great where you would find people guiding and uplifting many such issues there. So hold onto your patient peeps! Slowly but surely you will get there.