Last Updated on June 4, 2020
Dealing with debt can be traumatic. Owing just a little debt can quickly pile up and you may find yourself watching the interest piling up as well while you make very little dent in paying off the capital. If you find yourself in debt and feel like you’re drowning, don’t panic. Help is out there and in this blog we’re going to walk you through some simple steps you can take to start getting back on your feet.
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Take a deep breath and get real. You’re going to have to face those debts head-on so take some time to write down everything you owe, to whom you owe it to and the interest you’re paying. Only then will you have a very real idea of what it is that you’re facing.
If you haven’t done so already stop using your credit cards, lock them up or give them to someone you trust, out of your reach. Then it’s time to take action.
Find the debt that is charging you the highest interest rate. While you are still able to make the minimum repayments on the other debts, it’s time to take it up a notch with this one. In theory if you’re paying back a credit card with a high-interest rate, you could transfer the balance to a 0% interest card, but applying and getting that card carries two risks: first the chance that you’ll simply be turned down and secondly that you may then have access to more credit that will just ramp the debt up. It’s worth investigating but tread carefully.
The same goes for consolidating loans, there are many local programs available to help you out with this.
Focus all your efforts on getting this high interest debt paid down. Be patient, it’s going to take time but once you have this debt paid you’re going to create a snowball effect and have more money to throw at the next debt. In turn, pick the next highest interest and payback as much as you comfortably can each month until this debt is also gone. The more money you have free, the quicker the rest of your debts will disappear.
Free Up Some Cash
It might be that making that switch to paying back more than the minimum repayment is hard and if that’s the case, you’re going to have to find a way of freeing up a little more money in your life. It’s a tough decision but if you do have something to sell, like a car, and it’s not going to make life unbearable, think about selling it.
Consider it an investment into your debt-free life and one that’s so worthwhile making. Once you’re back on your feet again financially, you can revisit the idea of buying a car, but for now, focus on ridding yourself of that awful burden of debt. Get free and begin the rest of your life, without that gnawing fear of dread that being in debt brings.