Getting Your Debt Under Control
Unfortunately, debt can be very easy to get into but incredibly difficult to get out of. If you owe a lot of debt, you likely have to pay a lot of interest. Every month you carry outstanding debt, you pay more interest and that makes paying down your debt even more difficult. If this continues for a while, it can start to seem hopeless. Debt problems can quickly take over your life. People who struggle with debt often have trouble sleeping, eating well, exercising, socializing, and carrying out everyday activities. The stress, anxiety, and worry that come from debt trouble can become overwhelming. This is especially true if you have debt collectors or collection agencies calling.
If you’re struggling with debt and feel like there’s nowhere to turn, know that there are options. Here are some tips for how you can get your debt under control and stop it from taking over your life.
Be Proactive and Understand your Debt
A common problem is that, when people are faced with a lot of debt, there’s a tendency to ignore it. You might not even open your bills anymore because you know you can’t afford to pay them, or you may stop answering the phone because you don’t want to deal with creditors.
However, avoiding your debt doesn’t make it go away, it just makes the situation worse. Interest continues to add up and that makes dealing with your debt even more difficult.
While it might cause you anxiety to look at your bills and debts, it’s important to do so. Sit down and figure out how much you owe, who you owe, what interest rates you’re paying, when you’re expected to make payments, and more.
Come Up with a Plan
Once you know what you’re dealing with, you can plan for how to eliminate your debt. There are numerous strategies you can take, but a common one is to focus on the debts with the highest interest rates. These debts cost you the most every month, so it makes sense to try to get rid of them first. Figure out how much you can afford to pay then design a plan that prioritizes your most expensive debts so you can get them out of the way as quickly as possible.
Not only will having a plan help you pay down your debt, but it will also help you feel much more in control of your situation.
Update Your Budget & Change Your Behaviour
There’s a good chance that you’ll need to modify your budget so that your new debt repayment plan works. Look at what you’ve been spending over the last few months. If you haven’t tracked your spending, look at previous credit card and debit card statements. These can likely help you figure out where your money is going.
Once you know what you spend money on, think of what you can do without. You may have to change your behaviours to make your budget balance. For instance, cooking at home instead of eating out can save you a lot of money, especially if you frequently eat at restaurants.
Another important behaviour change is to stop using your credit cards. It’s incredibly difficult to pay down debt when you’re also adding on new debt, so stick to cash when you can. To do this successfully, you’ll need to track your expenses and modify your budget as you go so you don’t end up overspending.
Think of Ways to Earn More
In addition to finding ways to save more money, you may also want to look at ways that you can earn more as well. If there are opportunities to take on more hours at work or work overtime, this can be a good option. You can also do freelance work on the side to earn additional income. Another option is to sell things that you no longer use online or at a yard sale. Not only will this help you earn extra money, but you’ll declutter your home at the same time!
Know When to Ask for Help
If you feel like debt is taking over your life and you don’t know what to do, help is out there. For instance, a Licensed Insolvency Trustee can review your situation and let you know what debt relief options are available to you. This sort of information can help you improve your financial future.