If you are taking the time to read an article about dealing with debt, it is likely that you have debt and you are looking for guidance or assistance in paying off this debt. There are so many people dealing with debt that you need to be aware that you are not alone in this matter and that a lot of people are looking for help in improving their finances and working towards a brighter future. If this is the sort of thing that sounds of interest to you, you’ll find that there are steps you can take to move towards a better financial status.
Some of the most common signs that you are in debt include:
- You don’t have the money to pay your bills
- Once you have paid your bills, you don’t have enough money to live on
- You are contacted by creditors to remind you about payments you need to make
- You receive threats about legal action regarding debt and your payments
If you have experienced one or any of these outcomes, you’ll find that you have a debt problem and you need to be proactive in dealing with the matter. You aren’t alone in this situation but you have to take action. If you sit and wait in the hope of your debt problems resolving themselves, you will likely be sitting around for a long time, and you may find that you lose your home in the process of waiting. This is why you need to be proactive in dealing with debt and there are a number of ways in which you can regain control of your finances.
Don’t get yourself in More Debt
One of the most important things to do when you realise that you are in debt is to make sure that you don’t get into more debt. There is a saying that runs along the lines of “when you are in a hole, stop digging”, and this is definitely the case when it comes to finances.
Don’t take on more debt, don’t apply for more cards and don’t try and take out a loan. When you are dealing with debt, make sure that this is all of the debt you are attempting to clear, don’t give yourself another issue to contend with.
Create a Budget
If you are looking to move clear of debt, you’ll find that creating a budget is vital. You will want to list all of the relevant expenses in your life and then you need to list the amount of money that you need to pay beside each entry. It is important to include some money for enjoying yourself but of course, you need to be focused on clearing the debt.
You’ll also find that you need to be very strict with yourself when it comes to finances. This means that you need to stick to your budget because if you don’t, you’ll find that your problems become bigger.
You should also look to see if there are any expenses that you don’t need to have in your life or any area where you can downsize. If you are able to reduce your expenditure without feeling as though you are missing out on life, you’ll find it much easier to work towards paying off your debt.
Look to Pay Off the Debt with the Highest Interest Rate First
If you have a debt, such as a credit card or loan, with a higher interest rate, you’ll find that a lot of your money each month is spent on interest payments. This means you will not really be taking steps to move free of debt, which isn’t of benefit to you. When you review your finances, be sure to look at the APR figures for all the debt you are dealing with and if you can, focus on the one with the highest APR. Clearing this off first will provide you with the ideal platform when it comes to improving your finances and getting back on your feet again.
There is also a lot to be said for consolidating your debt if you are in a position to find an APR that is more affordable than your existing loans or debt. This is a tactic that has helped many people move out of debt and guarantor loans are a good way of finding an affordable rate of APR.
Dealing with debt isn’t easy but if you are proactive, you’ll find that you can take great steps to achieving your financial goals.
Andrew Reilly is a freelance writer with a focus on news stories and consumer interest articles. He has been writing professionally for 9 years but has been writing for as long as he can care to remember. When Andrew isn’t sat behind a laptop or researching a story, he will be found watching a gig or a game of football.