Paolo Bacigalupi once said, “debts are a heavy burden. Throw them off, and you walk free.” Many today look way older than their age, not because of any ailment, but because of the yoke of debt. More specifically, they are drowning in debt.
Almost everyone has been in debt in one phase of their life, but as they say, “it’s not what happens when you fall down that matters, but what you do to get back up.”
Follow These Steps If You Are Drowning In Debt
If you ever find yourself tangled in an unending web of debt, the following lifehacks listed below will get you out of the situation as long as you are willing to diligently follow the principles and apply them to your daily life and routine — success is not an accident that happens to those who are unwilling to move a muscle.
1. Decide You Want To Remain Debt-Free
The first step to leaving a lousy predicament is taking a bold and daring stand to win regardless of the uphill task facing you. Generally speaking, living debt-free can be really exciting, especially when you consider the emotional freedom and benefits that come with it, but you have to understand that there are mountains to climb in this journey as well as bumps on the tracks.
Knowing the challenges and what it will cost you — as well as the gains at the end of it all — will always add gasoline to your fire anytime you feel weary or worn out.
Why do you think you have had enough of the red stamped envelopes filling your mailbox? Why have you suddenly decided to tow the part of financial freedom? Answer these questions, write down your answers, and constantly remind yourself of what you stand to gain at the end of it all.
Remember, the end will always justify the means — never forget.
2. Seek Help Where Necessary
There is no shame in asking for help when you need it. The first place to begin is canceling subscriptions you don’t need — why pay for a gym class when you spend most of your time working?
You can also try reaching out to your creditors and letting them know the state of things with you. There are lots of kind hearts out there who have equally been through what you are currently facing, and you would be surprised at the help or suggestions that come your way.
I won’t guarantee every creditor would be willing to give you a listening ear or offer to lend a helping hand, but it’s definitely worth the try. The moment you catch up on your bills is the moment that prepares you to clear your debts.
3. Avoid The Temptation Of Incurring More Debt
Things couldn’t get messier than they already are, so avoid the urge to repeat the vicious circle that got you into debt in the first place. It’s always fun to keep swiping your credit card from time to time, but you have to be constantly reminded of your goals anytime the opportunity to swipe your card presents itself.
You can start by asking yourself the following questions; do I need this stuff? Does my life depend on it? Is there any health fulfillment that comes with swiping my credit card at this instant? What do I stand to gain at the end of all this?
Asking and answering these questions will always remind you of where you are and where you are headed. Don’t trade a lifelong achievement for a few hours of pleasure. Remember, is it worth it?
4. Revive Your Piggy Bank Habits
If you had a habit of saving pennies while growing up, then it’s time to revive it — if you didn’t, then it’s not too late to start.
People in debt will always feel the need to spend every penny they earn or get on servicing their debt, but while this might seem ideal, having a piggy bank stashed away for emergencies is always worth it to stay afloat during the entire process.
Learning how to increase your liquid net worth and emergency funds is a great financial strategy to help you with unexpected expenses such as fixing a flat tire or paying for necessary repairs without incurring more debt on yourself.
5. Have A Budget
There is an old proverbial saying, “cut your cloth according to your cloth,” that most people take for granted. Most times, people’s mistake is cutting their cloth according to their size, without considering the material or resources available to them.
You might be desirous for a particular lifestyle, but if your resources aren’t cut out to get you that life, you have to learn to make the necessary adjustments until things fall into place — and they always do if you are willing to discipline yourself.
Having a considerate budget based on your income is the map that’ll take you out of debt. Budgets keep you on track and also help you identify things you need the most. They help you create a meaningful scale of preference which is essential in such times.
Remember, what you want is not necessarily what you need — your budgets help you make such decisions accurately.
6. Put Extra Spending On Hold
Now is not the time to pay or renew a Netflix subscription, pay for that expensive diner, or get that costly jacket — there is a time for everything, and unfortunately, you don’t have the time nor resources to afford certain luxuries — it still boils down to cutting your dress according to your cloth.
Let me make it a bit simpler for you. Since the internet is now agog with one challenge or the other, why not try a “no spending challenge”? It simply means that you don’t get to spend on things that aren’t needed for your survival. Of course, you will have to keep paying rent, buying food and needed groceries, and other very essential commodities, but any additional frivolous spending would have to wait.
I dare you to try this for a month and see the astronomical changes it makes on your finances — I dare you.
7. Diversify Your Source Of Income
Aside from taking the logical step of not being a spendthrift, the next best thing that can happen to you in such times is to increase your source of income.
What do you do in your spare time? Do you just laze around and wait for your next shift? Or you simply try to catch up with the latest events on the news? I know we have to relax now and then, but don’t let it stretch too long.
The Good Book couldn’t have put it better when it said, “A little sleep, a little slumber, a little folding of the hands to rest — and poverty will come on you like a thief and scarcity like an armed man.”
Thanks to the emergence of apps like Doordash, Uber, UberEats, Grubhub, and other amazing platforms, you now have the opportunity to make some extra cash on the side without much stress. The good thing about such gig economy apps is that you can work whenever you want and sign out anytime you want.
The money realized from such platforms can be used to offset bills and set you on course for the financial freedom you deserve.
Another platform to leverage is freelancing sites such as Freelancer.com, Upwork.com, and Fiverr.com, which offer you the chance to sell your services. Unlike the other platforms I mentioned earlier, you would need some level of commitment to meet clients’ deadlines, but it’s worth trying if you feel your work schedule can be flexible.
Services required on these sites can include website development and design, graphics design, ghostwriting, and a whole host of others.
If there is one thing you have to remain committed to cheating on, it should be your 9 to 5 income. Remain aggressively committed to raking in more money, and in little or no time, your financial woes would be a thing you would use to inspire others.
8. Use The Debt Snowball Method
The snowball method simply involves you paying up your smaller debts, then moving on to the larger ones until every debt is eventually cleared up. In any race we are in, we need the slightest motivation to keep going, and little wins such as clearing minor debts will go a long way in assuring us that all will eventually get well – He who is faithful in little will be faithful in much.
The more debts you clear, the more your debt snowball continues to gather momentum until you eventually stand above the debt that once stared you down.
9. Try Refinancing Your Loans
Refinancing your debt is another effective means of paying your debt if handled correctly. The explicit goal of refinancing your debts is to get new loan deals that offer you a lower interest rate than the one you initially signed up for. With such arrangements, it’s very possible to save lots of money that wouldn’t have been possible. Such savings can be channeled to paying off your debts faster.
The thing to look out for in such deals is the new loan charges and other additional costs and excesses they are likely to come with. Stay away from any refinance deal that doesn’t enable you to save money overall — you will be better off with your old loan instead.
Student loans are one of the loans that need careful consideration before attempting to refinance them. This is because refinancing student loans can make you lose some key benefits such as income repayment options amongst many others — in such cases, I suggest you stick with the devil you know rather than embracing the angel you don’t.
In Summary, Don’t Panic!
It’s very easy to fall into despair and desperation when faced with meeting up your loan obligations and their deadlines, but the key here is to remain calm. Embrace every day as an opportunity to win regardless of what the present predicament states. You are better off believing you can win.
You might be currently going through a lot at the moment, but it only gets worse when you allow it to sieve through to your inside. Develop a tough skin for such situations, and don’t allow it to dictate how you approach other events that occur around you.
Don’t let debts affect how you treat a loved one or speak to customers at your place of work — many have gone through something worse or similar and came out with victory stories — your case won’t be different.
Stay positive, remain calm, take an aggressive approach, and will, but most importantly, don’t be tempted to take up illicit means to clear up your debts — those at the top did not fall there — there is a climbing phase we all have to endure to eventually win, and I know you will.