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The decision to get out of debt is always a good one, but it’s often hard to know where to begin – especially if the debts you have are quite large.
While the scary numbers will cause many people to bury their head in the sand and choose to ignore it, taking the first step to eradicating the debt from your life is a crucial step in the overall process, and one that, if you stick to it, will help create a much better relationship with money in the future, even if it wasn’t taught to you as a child.
Below are some tips on how you can begin to, not only get out of debt, but actually stay out.
- Get honest with yourself: so many people are afraid to open bills as they start mount up, but this avoidant behaviour can lead to serious problems down the road, so no matter how scary it seems, you need to open those letters and face them head on. In most cases, the idea of something is much worse in our head than it is in reality, and you normally find that it’s a loss less intimidating once you know what you’re dealing with, and that it’s a lot less in terms of numbers, too. You need set aside a couple of hours one day and go through everything you owe, then either write it down, or put together a spreadsheet.
- Make a plan: if you’re going to pay off all your debt, then you need to really make a strict plan for yourself that you know you’ll stick to. How you choose to pay things off is really up to you – you can choose to pay small amounts towards each debt, or you can focus on one debt at a time, but what’s important is that you have a plan with a deadline that you can realistically achieve.
- Reach out to those you owe to: this is actually a pretty important step that many people overlook because they either find it too scary or don’t think there’s any point in doing it, but in actual fact, reaching out to those you owe money to can help you in a big way. All you do is either write to them or call them, and explain your situation.
You can ask them for a payment plan and really let them know that you’re ready to pay everything back. In most cases, they will be more than happy to work with you, and typically they will waive the interest as long as you stick to the payment plan you agreed with them. As interest that keeps adding up is really one of the biggest issues when controlling debt, then this can make a huge difference.
- Consolidate: if you just want to be done with the debt as quickly as possible and bring everything into one single payment instead, then looking for a way to consolidate your debt is a good idea. There are a few ways to do this: one would be through a loan from someone like Enness Bridging Finance – the other would be to speak to a debt consolidation agency who work on your behalf with the companies you owe money to. Usually these companies can get the interest, and instead of giving you a cash loan, they basically take on the debt and then you agree to pay them a small monthly amount which they divide across all of the people you owe money to. Doing it this way obviously takes longer than a loan, but it’s a good way to go if you can’t afford to pay back a loan or have trouble obtaining credit.
