It’s not easy to live a debt-free lifestyle, and with so many demands on your wallet each month, it’s easy to fall into debt. If this is you…if you are not waving but drowning…you need help, and fast. Being in debt is a horrible experience; not only does it hurt your spending power, but it can cause you a great amount of emotional stress. In this article, we will give you some advice on how you can finally get out of the sea of debt you have fallen into. It’s not easy but it is possible.
Cut up your credit cards
If credit cards have become a problem for you, stop using them. We realise they are great in an emergency, but you are probably paying back the interest each month, rather than the actual money you have spent on them. If you are reluctant to cut up your card, then consider transferring the balance to another card with a lower interest. Your current card issuer may also negotiate your current interest rate if you threaten to take your business elsewhere. When you have finally paid the card off, then cut it up. It will only lead you into further debt in the future, and if you aren’t in a position to make those repayments, you don’t need a credit card in your life anymore.
Speak to your debtors
Whoever they are – credit card companies, banks, energy providers – if you are having difficulty making payments, be honest with them. In some cases, they will work out a payment plan with you, enabling you to pay off your debt over an extended period at a lower cost each month. This is better than burying your head in the sand and hoping the mailman won’t bring you another letter of demand from whoever you owe money too.
Consolidate your debts
If you have loans coming out of your ears, it makes sense to consolidate them, as this will help you get a better handle on your monthly payments each month. Rather than worrying about individual payment dates, you will only have one to remember. However, when consolidating, shop around and find something with the lowest interest rate. Considering you are probably already paying loads of interest on individual loans at the moment, you will make a considerable saving with one low-interest loan. For further advice, read this article, and consider whether consolidating is the right move for you.
Don’t add to your debt
Many people take out another loan to pay off their current one, but this is a trap you don’t want to fall into. You will never get out of debt this way, especially if you haven’t bothered to budget your money effectively. If you do need money quickly, a short-term loan with low interest is better than applying for something longer term. Try this out, for example. However, when possible, try and source money elsewhere, such as asking family and friends, or asking for a payday advance if you need money in an emergency.
It can take time to clear your debts, but the advice above should reduce your stress. If you are struggling right now, speak to somebody about it. There are debt-advice organisations online and in your local community that can help. Speak to them for further, qualified advice.