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Debt can ruin lives. It can keep you awake at night and if unmanaged will consume every area of your life. Often, the initial solution to managing debt for many people is to take out more debt. Keeping up with repayments can leave you out of pocket, and then when they need money for something that comes up out of the blue, they turn to payday loans with substantial interest rates. Here’s How To Overcome Debt And Get Better With Money
How To Overcome Debt And Get Better With Money
Having a stack of debt is bad. If you are juggling cards on top of loans and have multiple lines of maxed-out credit, then you are heading for disaster. Your monthly repayments will no doubt be sky high, and when you look at the detail, it is unlikely that you will be paying off that much. Instead, the majority of your payments will be spent on interest repayments. As such, you are never likely to get out of debt.
Find Out Your Credit Rating
If you are heavily in debt and struggling, chances are, your credit rating will be reduced. The first step in how to overcome debt and get better with money is finding out how bad things already are.
Run a free credit check on yourself to see where you stand. It can often make for sobering reading. Having a poor rating will mean that you are more likely to get turned down for most loans.
Look At Secured Lending
One route that you may consider taking is to get a secured loan to consolidate all of your debts. By securing the loan to your home, a lender may look more favorably on you and lend you money. You can use your consolidation loan to repay all of your debts immediately. This will mean that you only have one interest rate and one monthly payment. This will very likely shrink your overall outgoing each month while giving you a definitive end date that your debt will be repaid by.
Before you take out this type of financial product, you do need to consider the impact of a secured loan on your lending profile. If you miss payments, you could have your home repossessed. However, if you stick to the repayments, your debt will shrink, and over time your credit score will improve.
Look At Your Overall Finances
Take the time to get to grips with your overall finances. Chances are if you have gotten into this much debt then you have had more going out than coming in. You need to work out ways of dropping any non-essential spending and looking at ways of reducing your essential costs.
Create a spreadsheet that tracks all of your income and expenditure and get to grips with the exact amount that you have going out each month on mortgage or rent payments, bills, and loan repayments. Compare this with your current income. Hopefully, your outgoings are considerably lower than your income. Otherwise, you are living beyond your means.
Switch Suppliers
Get some quotations from alternative insurance, energy, and phone suppliers. You may be overpaying in these areas, and switching may save you quite a bit each month. Very often, companies offer incentives to new customers. Over time these fade away, and when you have been with a company for many years, you end up paying well over the odds for a service that you could be getting for less.
Cancel Unused Services
Cancel any subscriptions or services that you do not get full use of. There is no point in wasting money on something that you don’t use. This might include gym memberships or streaming services.
Plan Your Meals
Creating meal plans will help you to get to grips with your monthly food shopping. If you find that you go into a supermarket without a proper plan, then you will come out with too much stuff. Impulse buys can be costly, and if that is the way that you manage your life, then it is not sustainable.
Using a meal plan will give you an exact list of the products that you need to buy. This accurate shopping list should be stuck to rigidly, and you should only consider the aisle end multi-buy bargains if they are on your list.
Sell Unwanted Items
We have all got cupboards full of unused or unwanted items. Think about having a clear-out and selling some of these things to get some money back into your bank account. Create an eBay account, or list your items on a sellers page on Facebook to get things sold. Don’t forget to take a good, clear picture of the item and write an accurate description.
See also – It’s OK to be selfish sometimes
*this is a collaborative post*