Debt is a terrible thing to have which can destroy our confidence and even make us lose everything we have worked so hard to build in our lives. It can be difficult to know what to do when we get ourselves into a situation of debt, and often a small debt can spiral out of control and snowball over the years to become overwhelming for us.
If you want to get help dealing with debt this year, there are plenty of ways to do it. Avoid digging yourself into a deeper hole and simply seek out some help with these simple tips.
Step #1: Don’t Ignore It
The worst thing you can ever do when you find yourself in debt is to simply brush it off as nothing. When you initially get into debt you may mistakenly think that it is nothing to worry about and leave it hanging there, but over the years it will rack up and eventually you will not be able to afford to pay the sum back. If you allow yourself to get into more and more debt at this time you will find yourself with a terrible credit score and a huge bill to pay back. Make sure that as soon as you find yourself in debt, you do something about it and either pay the amount back or ask for help.
Step #2: Tell Your Family
If you ever find yourself in a situation where you can barely afford to pay your bills, just remember that you are not alone in this and your family and friends will always be there to support you. Tell them what’s wrong and they may be able it help you out. Your family will always back you no matter what, so trust that they will do everything they can to help you when you need it most.
Step #3: Tell Your Creditors
If you start to find that the monthly payments you owe are too expensive, you need to let your creditors know as soon as you can. This will avoid you missing payments and then ending up in a lot of debt. Most of the time if you tell them early on they will be able to negotiate new payment terms for you to make things easier on your side in the future.
Step #4: Make a Budget
When you are in a place in life when money is becoming an issue, you need to sit down with your partner and think about the cost of living and the things you need to cut down on. If you can find a cheaper energy company to go with and cut down the cost of your weekly shopping bill, you will start to free up money which can be used to pay off your debt. You will be able to get back on track and start at square one once again.
Step #5: Prioritise Your Debt
If you have multiple debts from different avenues you will have to prioritise which debt you pay off first. Always start with the essential debt before you tackle the little debts because this is much more important and will cause you more damage if you leave it as it is. Once you have tackled the big debt, you can feel free to start looking at the smaller ones.
Step #6: Pay Higher Interest First
Once you have split your debts into essential and non essential debts, you can list each debt by their interest value. You want to start off by paying off the debt with the highest interest rate. This will avoid you accruing a huge amount of interest on your debts as you pay off other ones. Once this is out of the way you can focus on the next highest and so on until you are debt free.
Step #7: Don’t Save
If you have gotten into the habit of putting away a certain sum of money into your bank account each month, it is time to stop doing so. When you are saving money you are putting it into a place where it will accrue a small amount of interest over a period of time. However, meanwhile you are losing a higher amount of money by leaving your debt unpaid. Instead of saving up your money, it makes more sense to use it to pay off your debt and save yourself the aggro of paying of a ton of extra interest too.
Step #8: Ask for Help
The best thing you can do when you find yourself in need of financial help is to simply ask for it. If you go to your bank and tell them of your struggles they will be able to offer advice and send you in the direction of people who can help you get your life back on track. It is always better to simply come out and ask feather than deny you have a problem.
Step #9: Consider Your Options
When you fall on hard times and try to rebuild your life, it can be difficult to know where to turn and what exactly to do. Going bankrupt can be a viable option if you are in a crippling amount of debt and it can help you start a clean slate and get your life back on track. Sure, it doesn’t sound like a good thing but it can be if you need it enough.
Step #10: Stay Positive
The most important thing to remember during this whole process is to stay positive and believe that you can get past this issue. You may think that the world is ending because you owe a large sum of money, but the truth is you will always be able to find a solution and you are never facing the problem alone. As long as you talk to the people you Love as well as get the advice you need, you will be back on your feet in no time and you can work to change your spending habits for the better in the future.