Thursday, September 21, 2017

# dealing with debt # finance

Dancing With Debt: Face Your Fears & Sort Out Your Finances



When you and your family are facing mountains of debt, it’s easy to feel like your life is out of control. Ultimately, however, things are only going to get worse than they are right now if you run away, put your head in the sand, or fail to start dealing with your debts. You need to tackle your financial problems head-on, and do it positively, too. Here are some simple suggestions that can help you avoid the incredible stresses and challenges of racking up enormous amounts of borrowing.


Face your fears

As we discussed in the intro, hiding from your lenders or the debt collectors won’t do you any favors. It keeps everything very much in the unknown zone, and the chances are you will be fearing the worst. However, a simple phone call to your creditors is often enough to ease your mental burden. Most lenders just want to know you intend to pay them back and see some evidence that you are doing so. Be honest about how much you can afford to pay, discuss your other financial commitments, and start working towards a debt free life sooner rather than later.

Get help

There is a lot of debt help out there. Plenty of nonprofit organizations exist that can give you free financial advice, or charge you a small fee for helping you out with a debt management plan. It can really ease the pressure you are facing from your creditors, as the debt relief agency will act and negotiate on your behalf. Debt settlement is also an option, according to debtsettlement.co. However, your liabilities need to be in a pretty sad state - and have existed for an extended period of time - before a lender or debt collector will accept any reduced offer.

Snowball

Of course, it’s more than possible to clear your debts by yourself. One option is known as the snowball technique. To do this, make a list of all your debts, draw up a budget, and decide how much you can afford to pay,. Then it’s a case of targeting one debt at a time while making the minimum repayments on all the others. Once your first debt is cleared, you move onto the next one, and so on, Psychologically, it’s an excellent way to ensure you feel you’re making progress.

Stacking

Another debt repayment technique is called stacking. You do this by listing all your debts in order, with the highest interest rates at the top - it’s these debts that are costing you the most money. Pay as much as you can towards this high-interest debt every month until it’s clear while maintaining your minimum payments on other debts. Once that first debt is cleared, move on to the next highest, and so on. Not only will you save money in the long-term, but you will also find that you start gaining a lot of momentum.

Having bad debts can put a severe strain on your finances, and your mental health. And they won’t go away until you deal with them. It’s vital to face your fears and sort out your finances, and the sooner you get started, the faster you will be debt free. Good luck!




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