Debt can be the most stressful situation that any adult
can face. Prolonged debt can cause stress and anxieties that can have serious
impacts on physical and mental health, often causing depressive disorders and
heart problems due to the corticosteroids that stress produces. It’s a sad
truth that debt will touch most people – 80% of Americans are currently living
with some level of debt, and over 50% of US adults have a negative net worth.
Debt is truly epidemic, and if you’re living with that financial burden, here
are some ways you can ease the strain on yourself.
Evaluate Your
Situation
Often when your
debt feels like an abstract problem, it can help write things down and make a
list. This list should feature all the debts you owe, as well as regular
payments for utilities, food and rent. Ensure you include details like the
creditor, the total amount of debt, monthly repayments and interest rates. It
can help make this list on a spreadsheet program like Excel, as you will find
it easier to take a look at your deficit and try to work out where you can make
savings.
Prioritize
Repayments
Once you have
evaluated your financial situation, you can work out the most pressing
repayments to make. Usually, the best solution is to pay off the debts with the
highest interest rates first. Interest rates can be a difficult beast to
understand, so make sure you’re clear
on what they are first. If your situation is more stable, it might also
make sense to pay smaller loans back first and start to cross some off your
list. You must remember not to rob Peter to pay Paul – only pay off what you
can afford. If you can prioritize them in a list order, you can integrate this
into your spreadsheet.
Create a Monthly
Calendar
Once you know
where you stand,you should create a repayment calendar to help you start paying
back your loans. Refer back to the spreadsheet you have made, as well as your
prioritized list of repayments. Work out a realistic calendar for repayments
over the next few weeks and months. Make sure you consider both your income and
your monthly expenses to make sure you can live while paying your loans. Work
out in which areas you can cut costs, for example, if you buy any pre-made food
or drink (like takeaways or store-bought sandwiches), you can cut costs by only
eating homemade food.
If you’ve never
made a budget calendar before, try
this link for a free printable monthly bill payment checklist template. If
you want to create your own monthly budget and you’re not confident that you
can, it’s
easy to learn how. Remember – money can be difficult to get right, and
there’s no shame in starting from scratch and learning or relearning the
basics.
It is important
to stick to your calendar not only to pay off debts but to make repayments.
When more than one repayment is missed in a row, interest rates rise. It would
help if you always tried to make the
minimum repayment to avoid late fees and default (when a credit card is cut
off), as this can make your problem worse. Make sure you factor this into your
repayment priorities.
Ask for Help
It is all too
easy for debt to get out of hand, and when this happens,you must ask for help. As
previously mentioned, debt
is extremely common in American households. Just because it’s prevalent,
doesn’t mean you need to live with it. There are many ways of changing routines
and improving situations, and one of the most effective ways is asking for help
from professionals.
If you are
facing debt litigation, you should seek expert
debt lawsuit assistance, so you know your
options and have the best representation.
If you’re regularly
pressured for repayments, it’s worth remembering that you’re in a better place
than you were before you created your repayment calendar and started taking
control over your debts. Collectors will appreciate this, and it is always
worth getting in touch with them and explaining your financial situation completely
honestly. They may help to restructure payments in a way that you can afford.
You can also contact a consumer credit counselling agency. These are non-profit organizations designed to help people find a workable solution to their financial problems.
Create an
Emergency Fund
Once you have
created a healthy repayment plan and are confident you can continue making
repayments, you can create an emergency fund. Even small funds can help you in
future as they are an alternative to a loan.
