Debt is a serious issue for many people across the world. It can lead to loss of personal property, a lower quality of life, and severe health issues such as stress and anxiety. Like quicksand, it is very easy to become entrapped in its vicious snare, and very difficult to escape from without help.
Luckily, there are many resources to research in order to find expert tips on debt management. In this guide, you will find five steps that will help start you on the road to financial recovery.
1. Start a Budget
This is a pretty easy start. Take a thorough look at your income, your monthly expenses, and finally your assets. Write these values down in an organized, easy to read manner, or search out an online budget worksheet to enter all of your information on.
Pay close attention to the amount of money that is entering your budget, and how much is exiting per month. It is an easy mistake to make when you spend a bit more than you make. If this is so, your spending habits must be changed immediately.
Calling your credit card company can be a very worthwhile endeavor. In all honesty, it cannot hurt to ask for a lower interest rate. It has been said that many people simply do not think to call their creditors while their finances fall into debt. If you feel yourself falling behind, please take this into serious consideration.
3. Consolidate your Commitments
If you have multiple credit card and loan bills coming at you every month, it is understandable how you could feel smothered or constrained by debt. A good way to relieve this tension is to fold these obligations into one easy to handle loan that you pay once a month.
Credit card payments can be consolidated this way, as can student loans. This will help you stay ahead instead of falling behind while juggling multiple payments.
4. Prioritize Payments
Sometimes you just cannot help but miss a bill, right? It can happen to anybody. When that happens, though, you are faced with a tough decision. It is recommended that you keep current on obligations such as mortgages and auto loans. Necessities such as utility bills and very important debts such as student loans or federal taxes should take priority. It hurts to let some things slide, but at the end of the day, some things are just more pertinent than others.
5. Consult a Credit Counselor
While it is possible to handle things yourself, there are professionals available for a reason. Besides, two heads are better than one in some cases. A counselor can negotiate with your creditors on your behalf, and possibly make a better deal than you could ever land on your own. They could even potentially get some late fees or penalties eliminated for you. They will also act as a consolidator, arranging one monthly payment for you that is then distributed to your creditors.
When choosing a credit counsellor, however, always look for a non-profit agency. Experts say that for-profit agencies tend to get worse deals for you than that of a non-profit, or even if you were to just negotiate for yourself.
Debt is a scary nightmare that feels impossible to wake up from, but it is not possible. All it takes are a few carefully thought out decisions and asking the right people for help. Just keep your head up, your mind calm, and walk yourself through these steps and you may just find yourself walking the road to success once more.