Being in debt is not only not a fun position to be in during life, but it is also very wasteful because you are simply throwing money down the drain paying interest and possibly penalties and late fees. Thankfully, there are a lot of tips on how to get your debt not only under control but eliminated entirely. Here are some tips on how to do just this.
Come to Terms with Your Income
While most blog tips will tell you to put together your budget, this can be problematic to some. A budget is a very important tool to reducing debt as it lets you know how much money is coming in and how much money is going out. However, the best budget in the world if there is simply not enough money coming in to cover the bills that you cannot change. These bills include housing, car payment, and insurance, among others. By being honest with yourself about your income, you can decide if you need to get a second job.
Get A Loan
Borrowing money when you are trying to reduce your debt may seem counterintuitive on the surface, but it can be quite smart if done correctly. For instance, by taking out a personal loan for the purposes of private student loan consolidation, you can combine all of the loans into one monthly payment as well as reduce the interest rate as well. This can potentially save you thousands of dollars a year in unnecessary interest payments.
Stick with Your Method
There is no one best way of paying off your debt. While there are recommended methods, you need to find the one that will work best for you and, more importantly, one that you will stick to. Set realistic goals for yourself so that you do not talk yourself out of the big plans you have. It may also be a good idea to reward yourself when you reach certain milestones in your debt repayment. It doesn’t have to be something extravagant.
In fact, if you’re trying to pay off debt, it really shouldn’t be anyways. It could be something like a day at the beach with your friends, a lazy weekend at home doing whatever you enjoy, or even a pizza and stay-at-home movie night. Small rewards along the way will keep you motivated to stay on course.
Sometimes, It May Be Insurmountable
Unfortunately, there are times in life when the debt, through no real fault of your own, may simply be just too much to ever pay off. These are times when consulting with an attorney and perhaps declaring bankruptcy is the viable solution. There is certainly no shame in this.
Overwhelming medical bills, a failed business, or a host of others can add to the debt and make it impossible to ever get paid off. Talk with professionals who are experienced in this area and ask what their advice would be in your situation. You’ll still pay a portion of the debt off and you can start life again with a clean slate.