Debt is very much on a sliding scale of severity, from the exceedingly common and significantly more manageable student loan to a far more worrying and frankly incomparable payday loan or outstanding payments to one or more debt collectors.
If you, or someone you know and care for, is currently struggling with debt, or debt repayments, then continue reading to learn of some positive, practical, and proven-to-be effective ways to finally fix your debt problems once and for all.
List Everything You Owe
It is highly likely and genuinely totally understandable if, in recent times, you have been ignoring the letters falling through your mailbox and not even listening to answer machine messages from numbers you don’t recognize.
However, the first step to finally fixing your debt problems once and for all is to remove your head from the proverbial sand and go through everything to list every single debt, including the remainder left to pay and the name of the company you owe.
Choosing a financial advisor is crucial for your financial well-being. Start by clarifying your needs and goals. Look for advisors with relevant credentials and experience, ideally with a fiduciary duty to act in your best interest. Understand their fee structure and communication style, and consider seeking references or reading reviews.
Trust your instincts and pick an advisor with whom you feel comfortable discussing your finances. Take your time to research and interview multiple advisors before making a decision. Remember, the right advisor can significantly impact your financial future, so it’s worth investing effort into the selection process.
Prioritize the Debts
The next step is to prioritize those debts which either affect your daily life in terms of the quality of life or else those which have been left to the point where now repossession and court orders are now a possibility.
Such debts which should be prioritized over others include:
- Rent
- Utility bills
- Court fines
- Secured loans
- Mortgage repayments
- Taxes
Those which obviously should be addressed as soon as possible, but would be considered by a professional as non-priority, include the following sorts of debts:
- Catalog repayments
- Home collected credit payments
- Bank loans
- Store card payments
- Loans from friends or family members
- Overdrafts
- Credit card payments
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Consult a Financial Advisor
It may well be that once you have confronted mentally and physically the amount of money that you owe to various companies or individuals, that you can see the proverbial light at the end of the tunnel, and you are able to handle your finances on your own.
However, if this is not your case, then it may well be time to consult professional, reputable, and established financial planners who can help you to consolidate both your emotional response to your debt and the debts themselves.
Look Towards the Future
Perhaps the most important thing to know and to really assimilate, especially if you are currently particularly struggling with your financial situation, is that there is hope for the future.
Furthermore, it is going to be incredibly hard to work your way through the troubling times into a place where you can once again not dread the mailman delivering another set of final reminders through the door if you don’t display and inwardly feel a positive mental attitude.
You ‘owe’ it to yourself to address your financial issues as otherwise, if left, you will experience substantial negative effects on your emotional health and wellbeing, such as:
- Serious impact on your sleeping patterns
- Low mood and even signs of depression
- Anxiety and worry
- Corrosive and extreme feelings of guilt and shame
- Isolation from your partner, friends, and family members
Approach debt cautiously, assess your financial situation before borrowing, and understand loan terms thoroughly, including interest rates and fees. Borrow only what’s necessary and manageable to repay, making timely payments to attain and maintain a good credit score.
Prioritize repayment of high-interest debt and create a realistic plan based on your income and expenses, using strategies like debt snowball or avalanche methods. Stay disciplined, avoid unnecessary debt and impulsive credit use, and seek help from financial advisors or counselors if struggling to manage or reduce debt.