Being in debt can feel like a terrible burden, particularly if bill collectors are calling. It can begin to seem that the debt will never be retired or that we are working only to pay bills. If you are in debt there are some things that you can do to ease your load and eventually, become debt free.
1.Understand what caused your debt.
In some cases the cause of debt is unavoidable. Perhaps it is the result of a catastrophic illness, accident or divorce. These events may come on suddenly leaving little time for planning. Other times it is simply poor fiscal management that leads to overwhelming debt. Spending without a budget and using cash to support a lifestyle that current income doesn’t cover are common culprits in this scenario. Regardless of what brought you into debt you can find your way out with discipline, time, patience and planning.
2.Disciplining yourself
Even if you did nothing to find yourself in your current financial circumstances (as in the case of illness) you must now resolve that you will make some difficult budget choices. It may not seem fair that you will have to give up many of the comforts you previously enjoyed but it is important if you are ever to gain the freedom and peace of mind that comes with being debt free. Resolve to live on a very lean budget, squeezing as many dollars as you can to be earmarked for your debt repayment plan. Look for low cost or free ways to substitute those things you must give up, at least temporarily, to get your finances in hand.
3.Allow enough time
When you have a lot of debt it can be easy to become discouraged as balances decline at a snails pace. Stick with it. Balances always seem to decrease at rates significantly slower than they increase. As long as you make regular payments of as much as you can afford your balances will go down. You may feel more encouraged if you pay off smaller debts first. As you pay off debts add that money onto other debts to retire outstanding debts more quickly.
4.Have patience with yourself
It can be easy to be down on yourself when you are in debt, especially when that debt is caused by poor financial management. Decide instead to forgive yourself and learn from your mistakes. Digging yourself out of debt can provide a powerful, lifelong lesson that helps you manage your finances well for the rest of your life. If you slip up a bit on your savings plan, don’t use that as an excuse to abandon the plan. Get back on track as soon as possible. Even better, you can look for additional ways to make up the money you misspent and contribute the funds to your debt retirement plan.
5.Make a plan
It is absolutely essential that you make and keep a budget. When you plan your spending to the penny you are less likely to squander dollars on items that should really be allocated for your debt retirement plan.