Dealing with excessive debt can really be a stressful experience.
Just think about the pressure of having to deal with persistent phone calls from your lenders or getting threats from debt collection agencies. I think at some point in all of our lives we have lived in dread of the phone ringing or picking up the mail.
They say that more marriages break up due to financial difficulties, not infidelity! When it comes to money. People can be pretty unforgiving. And while for some, ignoring the problem is all they can handle. A wise person turns and faces the problem. Taking these steps will help you improve your debt problem and significantly reduce your stress!
This post provides some practical strategies on how you can become debt free.
Assess the real situation.
Order a copy of your credit report from each of the three credit reporting agencies. Examine your report and make sure that all information or charges it contains are correct.
If there are details that need to be corrected, send a dispute letter to the credit reporting agency right away. If you are not comfortable with attempting to fix your credit on your own. Use a reputable credit repair company.
On the other hand, if there are no errors, use your report to study the debts you have with each of your creditors. Which of your debts have the highest interest rate? Which ones need immediate attention? For instance, if you have mortgage loan, then obviously, it should be at the top of your priority list.
Understand the root of the problem.
To really find a lasting solution, you need to understand how you got into this situation in the first place. Was it because of overspending, not paying your bills on time, having too many credit cards, hiding from your creditors, etc?
Once you determined the true cause of your debt problem, you need to accept that changes are necessary. Oftentimes, people who are in financial crisis require some drastic changes in their lifestyles. How will you be able to adjust your lifestyle according to your present situation? Self-discipline and motivation are a must!
Be creative. You need to be able to cut back on your bills so you can concentrate on debt repayment. Every penny you save can be a huge help to your repayment plan. For instance, do subscribe to magazines? How about reading them at your local library where you will find many magazines there free to be read. Do you like to “cut loose” on the weekends? How about finding cheaper alternatives then heading out to dinner or drinking with friends. How about inviting friends over for a “potluck” BYOB movie night? You, Netflix, and a bunch of friends can make for a fun (and inexpensive) evening!
Create a sensible plan before taking action.
People want the quickest way towards debt recovery but they usually get into more serious trouble. For instance, you may receive an offer of help from a debt consolidation lender or debt settlement agency.
While debt consolidation or debt settlement can be a viable solution, you need to watch out against predatory lenders and scammers who may try to take advantage of your vulnerability. Never make a hasty decision when it comes to your finances. Take the time to research all offers before moving forward. No matter how good it sounds!
Before accepting any help, see to it that you are getting assistance from a trusted source. If you do not know where to start, find a legitimate credit counseling agency- one that is recognized by government organizations in your country and a good track record of service, and ask for help.
