Drowning in Debt? Tips to Tackle It

Having a lot of debt can cause a strain on you and your family. The sooner you get it under control, the better you’ll feel. While it may seem nearly impossible, if you take it step-by-step you can recover and use the experience as a valuable lesson so that you don’t repeat it again.

The Value of Money

Everyone needs money to live and pay for things like housing, transportation, utilities and food. For this reason, you need to get smart and account for each dollar you spend. Once you start to manage your money positively, you’ll find that have more of it left over. It’s also a good idea to involve your children in your financial goals so that they understand how important money management is.

What You Owe

When the bills start to pile up you may opt to place them in a stack in a drawer and only pull one out when you have the money to pay it. This will only increase your level of stress, as the pile will remain. A better approach is to take the stack and list them on a sheet of paper to see exactly what you owe and who you owe money to.  This way you will have a clear understanding of all your expenses.

Paying Down Debt

Once you know what you owe and who you owe it to, you can start the process of paying them off. If you have a mortgage and have equity in your home you can contact the bank to see if you qualify for a home equity loan to help reduce your debt.

If you don’t have equity in your home, another option is a personal loan. You can use it to consolidate your debt and instead of having many small payments each month, you’ll have a single payment due that is likely far less.

If it’s your business that needs a helping hand with a cash flow issue or expansion plans, there are lenders such as LendingClub.com that offer this same type of loan especially for businesses.

Stop Wasteful Spending

Many people get into debt simply because they live above their means. They walk into a store for one thing and end up purchasing a large ticket item because they have a credit card to pay for it. If this sounds like you, don’t despair, you can change your bad habits and get on the road to financial security.

This doesn’t mean that you can’t have nice things just that you have to stop your impulse spending and plan your next purchase. If there’s something that you really want to buy, start to save for it. It’s a win for you because you will pay only the purchase price without interest and you learn how to control your spending.

Debt is something that can creep up and then cause you many sleepless nights. Thankfully, you have the ability to change the way you handle money and can achieve a sound financial future.

Categorized as Finance

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