Debt Problems: How To Find Your Way Out

2007-03-08 10:33:40

( Financial )



Debt problems cause a lot of anxiety and stress. But you do have a choice to end those sleepless nights and stressful days. Here are some steps you can take.


Form A Budget

Keep track of your income and your spending for a full month. Ideally, you should have more of the former than the latter. But if you are overspending, then it is time to cut back and tighten your budget. Minimize spending on unnecessary expenditures. Use the money you spend for these items for repaying some of your smaller loans until you clear them. Most debt problems stem from overspending, but with a lean and mean budget you are much closer to achieving financial freedom.

Do Some Part Time Work

If you can still manage it, find a second job. Even just a weekly gig will do. Use your income from this second job to repay small loans. Keep this up for a couple of years and your debt burden will shrink before your eyes. An ideal second job would not have to be too far from your house, since travel expenses can cancel out whatever you are earning from the job itself. Find work that’s close to a hobby of yours so you will be motivated to keep it.

Pay Bills On Time

Late payments will only make your debt problems worse. You will only be charged with large penalties and higher interest payments. Pay your balances as soon as you receive them and not when they are due. By doing this you are showing that you are committed in paying your debts and your creditors will have more trust in you –which can lead to a bit more leniency on their part.

Discard Your Cards

Credit cards can be your worst enemy when you’re trying to solve your debt problems. Dispose of all your credit cards except for the one with the lowest interest rate. Transfer your other credit card balances to this one card and use it sparingly.

Ask For Help
Help comes in many forms and sources. Emotional support from family and friends can come a long way. Financial advice from the right credit counselor can also help you better manage your debt problems and recover from them.

Consider A Debt Consolidation Program.

If your debts are caused by high interest payments on credit cards, consolidation loans can be an option. But considering that the debt loan is secured against your house make sure that you will be dedicated all throughout the program or else you’ll be in more debt and be homeless.

Never Run Away form Creditors

No matter how disconcerting dealing with creditors is, don’t even think of running away from your debts. Doing this will not only ruin your reputation, it will also erase your chances of getting rid of your debts. Facing the problem is the first step to solving it, remember that!


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