Debt is part of the economic cycle. But don’t mistake debt from loans; loans are applied by those who need to fulfill pressing needs such as repairs for their homes and tuition for their children while debt is when a person is has difficulty paying the loans he has taken. Everyone has debt, even the rich. But what separates the rich from the rest is that they don’t let their debts go out of hand. For a majority of people, their lives are eaten up with worrying about how to pay off their debt while still having enough for their daily expenses. Debt, however unavoidable, should not overwhelm your life. Here are a few tips to help you keep your debt in check or even pay them off completely.
- Live within your earnings. The main reason people live above their means and buy things they can’t afford is that they want to impress or keep up with their peers or colleagues. If you truly want to impress them, how about taking charge of your finances instead of letting them control you? Your lavish lifestyle may be the reason you’re deep in debt. The best thing to do is quit the sideshow and live within your means. This will force you to become absolutely mindful about your expenses and in turn, you will see that you have more money to spend on things that matter like your basic needs and you might even start to pay off your debts.
- Stop swiping. There’s a saying that every time you incur debt, you rob your future self. This is the case with credit cards. Each time you swipe that plastic card, you rob your future self by virtue of the interest. Sure, credit cards are handy during emergencies, especially when you don’t have enough cash with you, but why not spend money you do have? Instead of credit cards, how about opting for a debit card? If you purchase with debit cards, you will incur no new debt. Using credit cards to pay some of your debt is like paying debt with an even bigger debt, thus, sinking you deeper into the debt cycle.
- Remove clutter. Debts have a way of overwhelming you. A good way to regain (as well as maintain) your rational self is to write everything down. How much do you exactly owe, including interest? If you list them all in paper, you’ll be able to get a better grasp on your finances and you won’t feel as claustrophobic about paying them off. Now that you’re already making an inventory of your debts and finances, how about making an inventory of things you have no use for? Search your home. Chances are there are a few items you haven’t used in a while. That waffle maker or toaster you have stored away in your kitchen cabinet – how about selling them online? Instead of just letting these items rust away, why not make a few extra cash from them? You can use the money to pay off some of your debts while having some general cleaning done at the same time. It’s hitting two birds with one stone!
- Increase income. If your current income is not enough to pay off your obligations, how about doing some extra work on the side? You can start a small business or even take a part-time job on the weekend. This might be tiresome at first but if you’re serious about getting out of debt, you can tell yourself that the extra work is only temporary, until you get your finances sorted out. Motivate yourself to keep going until you achieve your goal.
Managing your debt takes work, and getting out of the debt cycle will not happen overnight. It is a slow process. In times of doubt and frustration, remind yourself that you are doing what you can to pay off all your financial obligations. Progress is progress, however slow or little. Again, debts are normal. What’s important is to always keep them in check.