Find Your Way Out When You Are Drowning In Debt
Being buried in debt from mortgages, credit cards, personal loans and bills, and so on is no less than a stressful living. Yet nobody deserves to lead a stressful life, so if you have just found yourself in a financial hole because of debt, the only real solution is to seek debt help. Companies providing solutions to debt often ask people to make some lifestyle changes, change their spending habits, save and start digging themselves out of their debt hole, one step at a time.
Why digging out of the debt is worth it?
Drowning in debt will only lead to a stressful life and affect your overall health. The time wasted worrying over how to pay the bills does not help make the load any bearable. Plus, the struggle to save for future expenses is real.
What digging your way out of the debt will do is, improve your mental and physical health majorly, boost your confidence when spending on your wants, and lead a happier and healthier lifestyle. Having more at hand after being freed up of the debt will give you greater financial confidence, boost your morale and give you better opportunities to save for the future.
Here are some simple ways to unload yourself from the weight of your debt
Analyse where you stand
This has to be the first logical move, analyse where you stand in the pool of debt if you are on the verge of drowning or just struggling with finances. Take a hard look at what you owe and to whom you owe. This becomes of utmost importance when you have a family with multiple spenders in the same household. So the first step is to make it sit down with the members and discuss the spending style. Without that, you will not be able to cover up the loopholes that this will create in the process of paying off debt.
Segregate the debt for repayment
While strategising for repayment, it becomes all the more important to understand that not all debts are created equally. Choose an appropriate method, establish a hierarchy among your debts and then create a plan; that way, you will be more likely to succeed. In this matter, experts suggest that you must target the high-interest debt first, low-interest non-deductible debt next, and tax-deductible last.
Avoid carrying credit cards; keep one if you wish to but just for emergencies. Ideally, you must lock all your cards away and go on a cash-only diet to stick to your repayment plan.
Pay off the debt of the higher interest first
Adopt this simple debt elimination strategy called ‘the avalanche method. It works something like this: suppose you have more than one credit card account and all of them with a certain amount of revolving debt. Using this method, you want to choose the one with the highest interest rate and pay off with as much money as you feasibly can, alongside making monthly minimum payments for the rest.
Once the money on the card with the highest interest rate is paid off, you can move on to the other card and apply the same strategy. This way, you will be able to tackle the debt one at a time. This strategy can also be applied inversely, paying off smaller debts, which is then called a ‘snowball’ method. However, remember that in the end, it matters less which one you pick and more that you stick to what you pick.
Stop adding new debt.
You cannot dig yourself out of the already existing debt if you keep on taking more loans, especially when you are on the verge of drowning in it. This strategy, however, can dramatically ease your situation. Stop acquiring new debt and focus on your cash-only lifestyle. Stick to the goal of getting out of debt, and you will see the difference in a month or two.
Consider seeking professional help.
If it becomes too difficult to handle, professionals are always out there to help. Seeking debt help only makes it better; they help you negotiate lower interest rates with credit cards. Changing spending habits and making those painful decisions on your own may be a little challenging, so there is no harm in using a little help.
Bailiff Help Now is a UK-based agency that works to help people who are drowned in debt write off up to 75% of all debts. Plus, our team of experts work toward stopping bailiff invasion in your house and helps you deal well with the threats!