Unfortunately, debt affects many of us at some point in our lives. Part of the reason for this is that there are many forms it can take. There are very few people who are complete strangers to the experience of owing money. The only real difference is in how much is owed. Some people only ever owe a little, and some end up getting into a hole where it feels like they can’t get out. The upside of all this is that, if you are in debt, you are not alone. Others have been in the same situation you are in. There’s good news in that, which is that help is always at hand. There are all sorts of things you can do to lessen the debt in your life, and all sorts of coping strategies too. In this post, we are going to look at what steps you can take to make your debt more manageable and less overwhelming.
The first thing anybody with any amount of debt needs to face is the question of how extensive their debt really is. For a lot of people, this is often the hardest stage of the entire process. The reason for this is that facing up to how much we really owe can be extremely daunting. This is particularly true, of course, if you owe a large amount of money to different organisations or different people. Nonetheless, it is a necessary first step. If you do not know exactly the extent of your debt, then you won’t have any idea on where to begin or just how bad it might be. So, before going any further, it is a good idea to sit down and work it all out. It is crucial, at this stage, to be honest with yourself. It might be tempting to casually ‘forget’ about a small debt, but it isn’t worth it! Be ruthless with yourself and get it all down on paper so you can see the amount exactly as it is.
There are, of course, many different types of debt. If you are unlucky, you might be victim to several different types at once. Regardless, when you are working out the extent of your debts, also be sure to pay attention to the type of debt. This will be crucial later on, as different types of debt have different repayment options. They also have varying levels of interest, and some might even charge for late payment (or, indeed, non-payment). Another important reason to work out what types of debt you have is that some are more important and need to be dealt with first. So working this out allows you to begin making a plan for how to deal with your debt. Once you have a plan in place, it is amazing how much better you will already feel, even before you have repaid anything! A lot of this is psychological; getting these first steps completed will already make you feel more capable of dealing with the problem.
Another important piece of advice is to take it one step at a time. Depending on the amount of debt you have, the entire process may take a long time – but that’s fine. The main thing is, you are dealing with it. Don’t get drawn into negative thinking. While it might be tempting, on occasion, to say to yourself that you are getting nowhere, it is an unhelpful approach. If you are too needlessly negative about the whole thing, then you might start to feel like you can’t deal with it at all. If this happens and it feels like it is getting too much to deal with, then this is a sign that you need to relax. Remember that you are, at least, trying to deal with your debt. Even if it is looking as though it is going to be a long, drawn-out solution, that’s fine. Remind yourself that even just paying a small amount off on your debts each month is better than not doing anything about it. Don’t panic, and be sure to take it easy!
So, the first step in any debt management plan has to be to cut your spending. It is incredible how many people avoid or ignore altogether this first and vital step, but it is really important. If you don’t cut your spending, then the chances are good that you will simply end up borrowing more money. Once you are borrowing money again, it’s not long until you find yourself in even deeper debt. Once again, a lot of it is psychological. It is darkly ironic, but a lot of people end up following this vicious cycle. They become stressed because of the amount of debt they have, so they overspend. The reason is different for different people, but the end result is always the same. So for one person the problem might manifest as overeating, for another it might be smoking. Either way, the money gets spent and before you know it you are in even more debt. So make a promise to yourself early on not to get into this vicious cycle of negativity. Sit down and work out all your outgoings before you start. Then, see what can be cut out. Perhaps you are spending too much on your phone bill for a tariff you don’t really need. If this is the case, talk to your provider. Or maybe you need to switch to a budget supermarket. It all depends on your and your situation.
Don’t Borrow More
Again, this might seem like a really obvious and basic step to take, but it bears repeating. Too many people simply end up borrowing money they never planned to, or never knew they would even need. Make a promise to yourself from the start that you won’t borrow any more money. If you make this promise to yourself, then you are more likely to stick to it. That, in turn, will make the whole repayment process a lot easier.
Cut Costs of Debts
Once you have sorted out your outgoing payments for all your essentials, and made that promise to yourself, this is the next step. Looking into cutting the cost of your debts is something that you should absolutely be taking an active role in. A lot of the time, this really does make all the difference. The difference between someone who gets out of debt in decent time and someone who stays in debt for life is often down to this. There are all sorts of ways you can cut the cost of your debts, and they all depend on your situation. The type of debt you have makes a big difference to whether or not there are ways to cut the costs. Credit card debts, for example, can be made much more manageable by simply transferring the balance to a cheaper card. It makes no sense to carry on repaying at a higher interest rate when you don’t need to. There are other options out there, so you would do well to shop around and see what you find. Remember to get help from the professionals – such as CCJ mortgage help at badcreditmortgagebroker.co.uk. The experts are out there – you may as well use them!
Talk to the Lender
Regardless of what kind of debt you are repaying, there are always options for you to consider. That is why it is always well worth contacting the lender to find out if any arrangements can be made. It makes no difference if it is a credit card or debt from an old phone bill. Talking to the lender can throw up all sorts of possibilities which aren’t there otherwise. It is also always best to talk to the lender before missing a payment or defaulting. If you know that you are going to be behind on your repayments, talking to them first is a very good idea. Most of the time, you can work something out between you. A lot of people feel that they simply can’t talk to a bank, for example, but that’s far from the truth. The truth is, the bank would prefer to arrange repayment with you. They would much rather agree on a plan than simply not receive any money from you!
Consolidation is a mixed blessing, and there is also a lot of inaccurate information about it floating around. Consolidating your debts does have some benefits. The main benefit of consolidation is that the overall cost of your debts is less – so you are literally paying back less in the long run. However, this does often come at a price. The main problem is that debt consolidation companies vary wildly, and it can be very difficult to know which to trust and which to steer well clear of. Consolidation should be a last resort!
The most important thing you can do for your debts, and for yourself, is to keep going. When times get tough, just remember that you are doing the right thing. Remember: repaying any small amount is better than doing nothing. So as long as you are doing something, you’re on the right track. Keep your head held high!