Most people have no idea how either the financial system or money works. In fact, they often romanticize both of these areas and live their entire lives without investigating how everything functions. First off, you have to realize that it’s impossible for everyone to pay off their debts. The reason for this is simple – for every dollar of fiat currency brought into existence (printed by central banks), additional amounts are lent out (normally up to 10 times the original amount!) This essentially means that for every dollar that’s created, additional interest is generated which must be paid back to these banks. The problem of course is that the number of dollars needed to pay back all of these debts never actually exists at any given time, everyone’s simply chasing interest payments and hoping that they come out ahead of their neighbor (who is also in debt). So, why am I telling you this? Well, if you want to get out of debt, you first need to know where you stand, and this might very well require you to reassess the way you look at the world in general. Here are some helpful ideas to consider…
Along with taking an equitable approach to how you manage your income, consolidation is often touted as a possible solution when facing loads of debt. Rather than having a plethora of various obligations spread out across a wide range of institutions, a consolidation service will collapse them all down to one single payment. For a lot of people, the thought of not having to worry about keeping track of paperwork from multiple organizations is enough to make them jump on this idea. However, be sure to calculate the actual level of interest you will end up paying over the entire length of the payment schedule. The last thing you want to do is end up paying a lot more when you could have simply left things as they were and handled each account separately. Look for the lowest available interest rate possible.
This one should be a no-brainer. In fact, if you haven’t already been budgeting up to this point, you need to start right away. Aside from trying to find an easy way to get rid of debt over time, having a budget means that you’re also protected in the event that you become unemployed or perhaps get sick and incur hospital expenses. Ideally, you want to set aside money to cover all of your daily needs in addition to having funds for saving and attributing to paying off debts. Whatever you do, don’t attempt to severely punish yourself by skimping on food, as your health is much more important than the debt itself.
Take a long look at ALL of your assets
You should also look at all of your assets if you haven’t done so. For instance, if you own property or other valuables, perhaps the best course of action is to simply sell most of it and get rid of your debts as soon as possible. Rather than letting accumulated interest run up to a point where you’re paying double the original amount or more, wiping theses debts early on will save you a ton of cash in the long run.