Credit: roman- via Freepik – https://www.freepik.com/premium-photo/woman-holding-dollar-bills-handcuffs_12712136.htm
It’s tough being in debt all of the time. You’re constantly worrying about money, spending more and more on your credit card bills, and still see no way out.
It’s time for a change. The longer you pretend it’s not a problem, the worse it gets. But if you’re ready to finally reach for financial freedom, taking these steps will make it a whole lot easier.
Confront Your Debt Head On
The first rule on your path to debt freedom is this: be honest with yourself. If you’re in denial about how much you owe or how serious the problem really is, you’re not going to take appropriate measures to fix the problem.
Life is busy, stressful, and hectic. It’s easier than you might think to let debts mount higher and higher. You might have a sense that you’re getting into financial trouble, but you don’t see just how bad it is. You make minimum payments and try not to think about it as the problem only gets worse.
The first step is to stop and tally up all the money you owe. Then, calculate how long it will take you to pay it all back at your current rate. It’ll be an important wake-up call.
Get Debt Counselling Help
You don’t have to do it alone, and in some cases, it might not be a good idea. Often people in debt feel stubbornly proud about paying it all back alone. But they often make it harder for themselves. By seeking out professional debt counselling help, you can learn how to make paying back your creditors faster and cheaper.
One thing that debt counselling can offer is debt consolidation services such as a Debt Consolidation Program (DCP). It can be hard to find debt consolidation with bad credit – if you need to take out a new loan. With a DCP, a certified Credit Counsellor from a non-profit credit counselling agency negotiates with your creditors to reduce or stop your interest rates and stop collection calls. A DCP provides immediate relief and makes your debt more manageable to pay off without resorting to a loan.
Change Your Relationship with Money
When it comes to money matters, sometimes your mindset is working against you. When it feels like you never have enough of it, you can wind up developing bad money habits that hold you back. Even people who earn a good living struggle with money because they’re not saving and creating wealth.
If you feel like you “never have enough,” you might fall into the trap of being content to get by and spend it all when you have it. You have to commit to saving by doing things like:
- Setting aside 10% of your paycheck;
- Tracking the money that you spend;
- Putting limits on your discretionary spending.
Don’t Cut Up That Credit Card Yet
It may be tempting to cut your credit card up and avoid the temptation of using it, but credit cards play an important role in your financial health. You need to use it to rebuild your credit score.
Unless you’re struggling to avoid abusing your credit card, try keeping it. In order to prevent your balance from creeping up beyond what you can afford, pay it off after every use.