Being in debt is a stressful experience. Constantly owing money to creditors can really play havoc with your emotions and your relationships. What’s worse, being in debt is expensive, especially when you consider that the annual rates on some products can be over 2000%. In fact, social scientists have found that being in debt itself can have adverse effects on your health.
Yet being in debt, no matter how expensive, can become a habit. It can be something we just accept because life is too expensive for our limited means. If you are undergoing financial hardship, you can discover more at NY-Bankruptcy.com. I don’t believe, however, that everybody that is in debt is doing everything they can to escape. So what can you do?
- Reduce Outgoings
The logical first step is to think about how to reduce your monthly outgoings. Reducing your monthly outgoings will determine how much money you can set aside for loan repayments. This means that you need to scrutinise your necessary bills. Come up with an itemised list of outgoings and ask yourself, is every bill on this list as low as it could be. What about your phone bill? Is there a chance that you could reduce the monthly amount you pay on your contract?
How about your electricity bill? If you switch providers, could you reduce the cost? Check your car insurance premiums. Have your circumstances changed in a way that is favourable?
- Become More Zen
Reducing bills is the easy part. None of us wants to spend money on bills because we want to spend money on the fun stuff in life. But if you’re serious about your debt problem, then you need to consider eliminating some of the fun stuff too. Examine your outgoings on non-essentials like entertainment. There’s a good chance this takes up a big chunk of your budget – and it’s largely unnecessary.
Become more zen and entertain yourself for a few months with the free things in life. Learn stuff online, go for walks or bike rides or volunteer for something in your community.
- Plan Your Repayments
Once you’ve done the groundwork and worked out how much you can save on bills and on the non-essentials, see how much money you have left over each month. Once you have this figure you can begin the work of deciding which lenders you want to pay back first. If you’re paying higher rates of interest on some loans than on others, pay those off first. In the long run, you’ll be paying less overall.
You can also try to negotiate lower rates of interest with your creditors if your debts are large.
- Ask For Help
Often at the root of a debt problem is a personal problem. You might want to consider finding some free debt counseling advice if you believe that your spending is motivated by emotional need. Have a look at what’s on offer at nyc.gov. Getting to the bottom of the emotional need to spend money will inoculate you against debt problems in the future.