The moment you first decide to sit down, become as honest as possible, and address your mounting debt – is the first day you can do something about it. Even if this simply means looking into the number of debts you have and calculating them, any step forward is a step in the right direction.
After all – many of us find it much easier to put our head in the sand, thinking that it’s a healthy approach in the here and now and that you’ll have the strength to address the problem later. The truth is that strength comes from sitting down and addressing difficulties in life even if we don’t want to.
Addressing problems head-on is often a lifelong lesson many of us still need to learn, whether it means being honest with our partner about an issue or having the confidence to ask for the raise you truly deserve at work.
When you’ve made that momentous decision to begin focusing on your debt and use websites like ours to help you in that approach, it’s important to avoid making things unnecessarily difficult for yourself. Let’s consider what that may mean in the long run and how to avoid unnecessary difficulties in the future.
Don’t Skimp On Tracking And Budgeting
The most important thing you can do is track your spending, especially when you’re in debt. Don’t even hide a small debt that you may owe a friend in your records. Make sure they are noted down in a safe place or digitally. Track the metrics, such as how long the debt has been held for, if interest has grown, who you owe it to, and how you can address it.
Don’t skimp on tracking and budgeting, even if it seems overwhelming. Simply knowing the scope of a problem can help it seem surmountable. You’re much more likely to take that first step when you know that a result is in sight and that you can get there if you really wish to.
Many people disregard the power they have to make significant changes in their life, and that’s why it’s so important to give yourself that first push towards growth.
Don’t Try To Solve All Your Debts At Once (Depending On Your Situation)
You’ll never pay each of your debts off at one time. While it might seem as though the best way to tackle debt is the same way you pale water out of a leaky boat, with debt, it’s often best to address them substantially, piece by piece.
Of course, this advice heavily depends on how your creditors are treating you and what debt collection activities they have in place – so keep that in mind. You can schedule your debt payments depending on how important they are right now.
For instance, you might owe $2,000 in credit card charges, but it may be that you don’t have to pay any interest on that until next year. If this is the case it may make sense to focus on a different debt with an active high-interest rate.
If it makes mathematical sense, debt consolidation may make sense. This is often best handled by contacting a debt resolution charity that can contact creditors on your behalf or that can help you curate a plan that pays back your most important creditors first and foremost.
However, what is important is contacting all of your creditors and letting them know you are aware of the debt and fully intend to pay it. This might involve working out a payment plan with one lender or paying a chunk off another debt at the end of a month.
Creditors are required to follow a fine line before their activity becomes harassment. If your creditors are contacting you at all hours of the night, there are certain legal actions you can take to stop the harassment.
Never Ignore Your Credit Score
A credit score can not only help you understand just what credit history you have and why that matters, but it also enables you to dissolve any issues degrading your debt month after month. For example, a credit report can help show you accounts that may be in default.
Be sure to do your research when choosing a credit report agency. For instance, this article, ‘How Accurate is Credit Karma?’ can be used to showcase just what credit agencies offer and what stock or trust you should place in them. If you can competently resolve that, you’re much more likely to understand just what metrics to use.
Often, the best advice is to use a couple of free services to help cross-reference the information certain agencies hold on you.
Don’t Over-Streamline Your Financial Life
Many people think you need to live like a hermit when you begin to address your debts to make sure that all of your money is funneled to the right place. It can’t hurt to make certain life changes to save money, of course, but don’t go overboard. You have to live too.
You have to sort out your priority bills, and you need to eat, and you need to have something to entertain yourself from time to time (as long as it doesn’t put you further in debt).
Don’t sweat the small stuff, like purchasing yourself a chocolate bar or occasionally renting a movie. If you deny yourself the little things that keep you going (unless you’re in very deep dire straits), you’ll be subconsciously inclined to give up the whole effort and once again resume (or develop) reckless spending habits.
Never Forget To Celebrate The Small Successes
Lastly, never forget to celebrate the small successes. Knocking $50 off a debt might seem small, but it’s $50 that no longer ties you to a creditor. It’s $50 worth of a good life decision. Don’t neglect to understand that, and don’t chastise yourself for the debt every single time you go to pay it.
You’re paying it – that’s all the compensation you need to expect of yourself, provided you learn the lesson involved.
With this advice, we hope you can avoid unnecessary difficulties that might suspend your success in addressing your debt.