There are many reasons you might find yourself with mounting debts. Each day, people encourage you to spend more than you have, and so it is no wonder that sometimes you cave to peer pressure. It seems like your personal image rests on how much you can afford to spend and how much you value yourself on a day to day basis. Before you start dealing with your debts, you need to change the way that you think about money. Stop assuming that money makes you who you are. You make you who you are. Money is a means to an end – nothing more. Once you have realized that, you can use these smart ways to get rid of your debts.
Work out how much excess cash you have
Half the population have no idea how much excess money they have each month. You need to know what money is yours to spend and what money you need for bills and other restraints. This part can be a little annoying, but you need to do it all the same. Work out what all your outgoings are and see what money you have left over. Only then, can you plan your budget to suit your income.
Release some equity in your home
If you have loads of debts that just keep on growing, you could cover them all in one easy payment. When you release equity in your home, it means that you get a lump sum of money you can use for whatever you want. Read the ultimate guide to equity release before you opt for this choice so that you understand the ground rules. Rather than owing money to loads of different lenders, you can extend your mortgage. That means you only have to pay your debt as part of your mortgage repayments.
Avoid retail therapy at all costs
Do you shop when you are under stress or sad? A massive amount of people use shopping as a form of therapy. If you hit the stores when you are down, you might get a momentary buzz from doing so. When the bill comes for your credit card, though, you will feel worse about yourself than you did before you spent the cash. Retail therapy is an illusion. Shopping never makes anything better.
Learn to say ‘no’
Is the reason you spend money because you don’t want to let others down? When it comes to social events, it can be difficult not to spend a whole load of cash. If you are a sociable person, you might find it difficult to tell people that you can’t make it to particular functions or events. Rather than canceling on everybody all the time, figure out how you can spend less while you are out with people. For example, rather than drinking wine, you could drink soft drinks for a while.
Keep track of your progress
When you can see how your hard work pays off, it will motivate you to carry on and start dealing with your debt. Some people avoid looking at bank statements and their accounts, because they hate knowing how much they owe. When you see your progress, though, it should help to inspire you. You need to have goals and targets when it comes to clearing your debt. That way, when you reach a goal, you will feel a level of satisfaction.
Debt problems are crippling when you don’t deal with them fast. Over time, the issue will cause your emotional stress. If you start working now, you can be debt free in no time. The longer you leave it, though, the harder it will be.