When you’re faced with multiple debts such as store and credit card bills and you’ve exhausted your overdraft facility at the bank, it can feel like you’re stuck, with the increasing pressure of mounting interest rates and penalties for missed payments. Debt can cause people to lose sleep at night from the stress that goes along with it; it can also put pressure on relationships between the person in debt and their family.
The worst thing that you can do is to bury your head in the sand. The situation will worsen and when you finally start addressing your debts, they’ll have grown even more unmanageable. To get out of debt takes a lot of hard work and determination, but it is not impossible.
Some people manage to do this by themselves through very strict budgeting. This means taking a good look at your expenses and seeing where you can reduce them on a month by month basis. Any surplus that you have left over at the end of the month needs to be diverted to paying off your debts gradually. You can save even more by getting the best deals available on necessities like gas and electricity, and other regular bills like grocery shopping, telecoms and insurance. The key to success is spending less than you earn – not an easy task; especially when unanticipated expenses like car repairs set you back temporarily.
DIY budgeting doesn’t work for everyone though, and the clarity of calling in the services of a debt management company is sometimes the best solution for someone who is floundering in the face of multiple debts. Working with a debt management company lifts a lot of the administrative stress from your shoulders and they can often negotiate better interest rates with your creditors than you could achieve alone.
If the debt levels you have are serious enough to warrant it, you might consider taking out a debt consolidation loan to clear multiple debts immediately, and then deal with paying off the new loan over a longer period. In theory this is a good solution but you need to be self-disciplined enough not to start spending again until that debt consolidation loan is paid off- a trap that many people fall into.
However you start to deal with your debt problems is going to have a positive effect on you. Starting to address the problem will galvanize you to make further progress and if you stick at it, you will be debt-free one day.
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