Debt is the single most soul sucking, dark cloud of sadness on the planet. That might sound over-dramatic. But anyone who’s been there knows the relentless feeling of pressure. Debt brings with it a weight and a darkness that affects every aspect of your life. It’s the easiest place to find yourself and the hardest to get out of. We’ve been there, and we’re here to help you find your way out. These are the tricks that worked for us, and they’ll work for you too. Here’s how you break the cycle.
- Acceptance – The first thing to do is understand the problem and say ‘no more’. That’s the moment that you stop allowing debt to control your life and vow to make a change. Facing up to your debt can often be the most difficult part. Whether it’s a huge overdraft, multiple credit card bills or pay-day loans, you have to face it. Get deep into your finances and work out the figure that you owe. Look at it, accept it and start to deal with it.
- Make a budget – Now that you know how much you owe, start making a budget. Incorporate your earnings, your outgoings and your interest payments on the debt. Get a sense of why your finances aren’t adding up. Learn to spot the weaknesses and the areas where you’re spending too much. This will help you get a good view of your finances.
- Start to cut back – Once you have the budget in front of you, start looking at where you can cut back. The first thing to strike off are any regular luxuries or unessential items. We know it’s hard to give these up, but trust us, you’ve got to free up that cash! Next try finding cheaper utilities and reducing travel costs. Look at every small area that you can make savings and divert the savings to debt repayment.
- Prioritise debts and speak to creditors – Lenders are not usually horrible monsters! Yes you owe them a lot of money, but they are almost always willing to help you. Prioritise the biggest and most urgent debts. Then call the lender. Explain your situation and arrange a system of payments that you can afford. Never use loans to pay off other debts! In this instance it may be worth consolidating your debts through a third party company. Look for all the available options here. Just make sure the repayments are manageable and work with your budget.
- Take steps to make sure it doesn’t happen again. – Once you slowly untangle yourself from the horrible web of debt, you need to start making changes. Instead of spending, start investing! Start planning for the future. Speak to a broker like ACM Gold to see how you could start investing your money rather than accruing debt. Build yourself an emergency pot of savings too.
Freeing yourself from debt is one of the most amazing feelings. Start taking steps today to reduce your debt. First things first, accept it, deal with it and start making changes!