If you have got yourself into a spot of financial trouble, try not to panic. Yes, being in debt can be terrifying, but try to stay calm. If you panic when it comes to dealing with debt, you will only make things worse for yourself.
You might be kicking yourself now for taking out that loan or getting that extra credit card, but try not to. At some point or another we all do stupid things – over half of the US is in debt, so don’t worry about it.
The fact you got yourself into debt isn’t important. What’s important is how you get yourself out of debt and your finances back on track. To help you do this, we have put together five simple steps you can follow that should put you on the right track:
Step 1: List your debt
In order from lowest to highest, list your debt. At the bottom of the list add all your debts up and write down the total amount that you owe. If this number is high, don’t let it panic you, stay calm. No matter how high your debt total is, you can clear it – trust us, it is doable.
The reason you need to list your debt is because you will find it much easier to deal with if you have everything that you owe written down. This will also make it easier for you to refer to how much you have left to pay off, once you start clearing your debts.
Step 2: Create a budget
Write down a list of all your monthly expenses, this should include everything from food costs to rent. Don’t miss anything out, as this is what you will use to work out how much debt you can afford to pay off each month.
If you aren’t able to squeeze much money from your paycheck, think about reducing your spending. Look at your monthly expenses and work out if there is any way you can save any additional money. Perhaps you could reduce the amount you spend on food shopping or luxuries?
Step 3: Speak to a professional
Once you have worked out how much you can afford to spend each month paying off debts, get in touch with a debt advice service. You can discuss your debts with them and ask for help and advice if you need it.
You might not like the idea of discussing your debts, but you will feel much better for it. Once you have got some advice, you will find it much easier to cope with your debts.
Step 4: Choose how to deal with your debts
Once you have taken some advice from a debt specialist, the next step is to consider how you will pay off your debts. There are so many options when it comes to paying your debts, what you choose to do depends on your personal circumstances.
For instance, you could either pay each creditor individually using payment plans. Or, you could use a debt consolidation company to get all your debts under one roof, and set up a payment plan with the debt company. How you choose to deal with your debts is up to you, it’s a personal choice.
Step 5: Stick to your agreed plans
Once you have set up your debt payment plans, it’s crucial that you ensure that you stick to it. Don’t make the mistake of missing payments, as this will just mean that clearing your debts will take longer.
If, for any reason, you struggle stick to your payment plan, contact the creditor immediately. If you call and explain the situation, most creditors are understanding and will find a way to help you, so don’t worry.
Being in debt can be worrying, but as long as you don’t bury your head in the same and deal with them, you will be fine. It might take you a while to pay your debts off, but with hard work, eventually, you will be debt free.