When debt gets too much: Tips to handle your money problems
When you’re in debt, it may start to feel as though the world is against you, but it doesn’t always have to be this way! Read on to learn some top tips for handling your money problems…
Sometimes, our money problems may be out of our control, with unforeseen circumstances putting you in debt when you least expect it. And, as many people who have struggled with debt can attest, it’s easy to find yourself digging an even deeper hole as you experiment with different ways to resolve the issue.
So, that raises the question – how can you handle your money problems when you feel as though your debt is getting too much?
Fortunately, there are plenty of simple steps you can take which will reduce the chances of your creditor having to go directly to a debt recovery law firm to take legal action against you. Take a look…
8 Tips to Help You Handle Your Money Problems…
1.) Get a comprehensive understanding of what you owe
First thing’s first, you’re going to need to get a comprehensive understanding of exactly what you owe. In many cases, when debt starts to spiral out of control, you may owe different amounts of money to a number of different creditors, so it’s important to get to grips with how much you owe each party.
You can then note down the total amount of debt, due dates, your expected monthly payment and any interest you’re expected to pay on top of the existing debt. Having all of your debts clearly laid out in front of you will mean that you can keep a closer eye on the bigger picture and stay on top of your situation.
2.) Make a clear payment calendar
Now you have all of your debts clearly laid out in front of you, the next step will be to create a clear payment calendar to help you keep track of each debt. The only way of being able to stay on top of this is to make sure that you plan well ahead of time. A payment calendar is key to this.
You can also build a payment calendar around when you’re expecting to be paid, which will help you to plan out how you’re going to use your pay checks to pay off your debts.
3.) Always try to make a minimum payment
When you’re making plans to pay off your debt, you should always be sure to set a minimum payment for each month. While you may be capable of paying more than this minimum payment, there may be some months when your other expenses creep up, such as if there’s an issue with your home or car.
If you’ve set yourself a minimum payment, you know that you’ll be able to better manage your money, while still being seen to making a genuine effort to repay your debt.
4.) Don’t forget about ongoing bills
That then brings us on to something many people fail to remember when it comes to paying off debts – keeping a close eye on any other existing outgoings. We all have plenty of outgoings that are difficult to keep track of, especially the smaller ones, like streaming subscriptions, or phone contracts.
While it may seem obvious to some, making sure that you factor in your monthly outgoings into your debt recovery plans is absolutely vital. Otherwise, you may end up in an even more difficult situation that previously.
5.) Prioritise which debts are most pressing
If you have multiple debts which need to be paid off, then you may need to prioritise which ones need to be paid off first. In most cases, this decision will be determined by the date the debt is expected to be paid off, the relative interest rates, and lenience of the creditor in question.
This should guide your decision making with regards to investing more money into paying off your debts, and allow you to do it much more efficiently.
6.) Build an emergency fund to fall back on
This may not seem like priority when you’re already being tasked with paying off debts. That said, it may prove to be a financially savvy decision if something were to go wrong further down the line.
Building up an emergency fund will mean that you have something to fall back on in the event that you’re faced with taking out another loan.
7.) Consider a personal loan with loved ones
If you’ve got debts to pay off, and you’re struggling to find the money to meet certain deadlines, it may be wise to speak to a loved one to see if they will be able to arrange a personal loan.
It’s important to note that this shouldn’t be a casual loan. To protect both of your interests, and prevent the potential for a disruptive dispute further down the line, you should get the agreement in writing.
The advantage of a personal loan from a loved one is that you can arrange a much more lenient payment schedule. This way, the consequences will be less severe if you’re unable to meet certain deadlines – so long as your loved one is understanding!
8.) Seek out expert advice
If you’re feeling overwhelmed by your debt, and you don’t know where to turn, then it may be best to speak to a debt specialist. They can work alongside you to go through your financial situation and advise you on what your short and long-term actions should be.
This should hopefully help to make your situation become much more manageable, relieving some of the stress that comes hand in hand with managing money problems.
Are you looking for debt advice?
No two person’s money situations are ever the same, which means you’ll need to take this advice on board and carefully tailor it to match your personal situation. With plenty of careful planning and budgeting, you should be able to manage your money more effectively and pay off your debts accordingly.
Have you got any more questions regarding managing your money? Or perhaps you have some further advice for anyone struggling with debt? Feel free to leave them in the comments below.
