Debt is one of those topics that people seldom talk about unless you are in dire financial straits. Being in debt isn’t always a bad thing, but if you can’t afford to pay your bills that’s when debt becomes a problem.
It’s no secret that many people borrow above their means. Even after the economic troubles from the last decade, folks are still taking out loans and credit cards to help them “get by” each day.
One sad statistic about today’s economy is that many of us cannot afford to live even a basic lifestyle. People’s salaries don’t typically reach living wage levels, and so borrowing money is a means to an end for them.
If you are struggling with debt, the good news is that you don’t have to suffer in silence. It’s feasible to take stock of the situation and improve your economic lifestyle. That means you won’t have sleepless nights worrying about money all the time. Here’s how to deal with debt the smart way:
Stop Taking Out Further Debt
It’s time to break the cycle. From now onwards, you need to stop borrowing money and taking out credit cards. That means you need to avoid “robbing Peter to pay Paul” as it were.
The only way you can rescue yourself from your financial hell is to stop taking out any more loans and credit cards.
Only then can you work towards establishing a solution to your debt crisis.
Get Rid of Any Luxuries
It’s likely that you are accustomed to a particular lifestyle. Of course, there will be “luxuries” that you don’t need to survive on a daily basis. I’m talking about things like cable TV, streaming music services and even junk food!
Stop spending money on those luxuries and you’ll soon see how much cash you can save. As a test, make a list of the luxuries you paid for last month and add them up. Now you can see why it makes sense to economize a little.
Consolidate Your Debt
It’s likely you will have a few credit cards under your name. They are the worst type of debt to have! Unlike loans, they are a form of revolving credit. That means you could technically never pay off the balance because you can keep buying stuff on them.
Go online and do some research on loans & debt consolidation. Find products designed for people that want to clear their credit card debt and close their accounts. Not only will you pay less each month, you can also look forward to a definite end date for your loans.
Pay Off Your Most Expensive Debts First
OK, so it might not sound as rewarding to do. But once you’ve paid off your most expensive debts, you’ll soon find that you have enough cash to spend on clearing your smaller loans and other debts faster.
I recommend making a spreadsheet listing the debts you have and how you plan on clearing them. That way, you can keep it updated with your progress.
Good luck!
