Being in debt can be overwhelming. It can make you feel powerless and hopeless at the same time. AJ Smith, VP of SmartAsset for content strategy and its managing editor, reveals that giving in to the idea of being incapable will further damage yourself.
Smith’s tips on how to take back power and regain financial confidence focus on getting accurate advice and educating yourself. Here are more tips to free yourself from financial bondage:
Assess your financial situation
Make an inventory of what you owe and how much it all costs monthly. Why is this necessary? It will help you in putting together a budget that’s practical and suited to your specific needs. Also, list down the interest rates for every balance.
Radio host and financial advisor Dave Ramsey propose the use of his debt snowball method to pay off your debt. Here’s how it works:
- List down your debts, do it in the order of smallest to biggest.
- Pay the minimum on all of the debts listed excluding the smallest one on the list.
- Pay all that you can on the smallest debt you have; once this is done then move on to the next item on your list.
- Repeat the steps above until you’ve gone through your entire list.
The method is useful because it modifies your behavior. As you see your debt shrinking one by one, you feel motivated to continue doing it. So, in time, you’re able to achieve your goal of being debt free.
Make a budget and stick to it
The thought of being on a budget irks you. However, when you’re in debt, it’s essential. By sticking to a budget, it guarantees you have sufficient funds to make your debt payments. It’s important to monitor your spending to track where your money goes. When creating a budget, prioritize food and housing needs. To help you build more funds to pay off debts, you can also cut cost on certain expenses such as these:
- Consider canceling your cable subscription
- Minimize grocery shopping
- Choose a more affordable cell phone plan
- Carpool to work or ride your bike more often
Know your rights
One of the downsides of being in debt is having to deal with collectors. Despite your predicament, you should be aware of your rights. Minimize the stress that comes with the challenges of dealing with your financial difficulties by familiarizing these rules stated in the Fair Debt Collection Practices Act (FDCPA) and implemented by the Federal Trade Commission (FTC). Know that those debt collectors cannot do any of the following:
- Harass, oppress, or abuse you when they communicate with you
- Make false statements or lie
- Threaten you with jail unless you pay
- Threaten to take away your property or your wages unless they’ve filed a formal lawsuit in court
- Present you with false court documents
Conclusion
Debt has the power to destroy your self-esteem, confidence, and overall mental health. However, you can let debt control you or you can take control of it. The choice is yours. If you allow it to overpower you, then it could spiral out of control. As a result, it will only prolong your anxiety which can be harmful to your health in the long run. There are debt relief companies out there which are willing to help you settle your debt with creditors. We recommend you view this review of National Debt Relief here, https://www.facethered.com/national-debt-relief-review/
Free yourself and regain your power over your finances by keeping these tips in mind. By managing your debts smartly, you can look forward confidently to a better financial future. Are you tired of letting debt control you? Are you ready to take back control over your troublesome debt?