Debt is not just a four-letter word anymore. It’s been a survival strategy for many families and individuals during the chaotic and challenging economic climate of the year 2020. As we enter 2021, the impacts of relying on loans are truly hitting home, and many families are battling to honor their repayments.
The need for debt relief is becoming increasingly urgent and overwhelming for a number of people. If you count yourself among them, here are four steps you can take to find the debt relief you need:
1. Know What Landed You In Debt In The First Place
A no interest money loan might get you out of immediate trouble, but you’ll only end up back in debt if you don’t get to the bottom of your problems with money. Taking responsibility for your situation is the first step to changing it. You have to be willing to face the difficult truth about your finances so that you can understand precisely what has landed you in debt.
Do you have poor financial management skills? Is your problem simply a matter of insufficient income? Or perhaps frivolous spending was what landed you in debt? Though these questions are tough, you don’t need to complete this step on your own. Sit down with someone you trust and evaluate your finances together.
2. Develop A Cash Flow System To Manage Your Finances
There’s an old saying that money doesn’t solve money problems. It sounds counterintuitive, but if you haven’t learned how to manage your finances, it can be true. Having a cash flow system in place ensures that you allocate your incoming funds correctly, spreading the cash where it needs to go to have maximum impact.
To get started, draw up a list of your essential expenses – food, rent, sanitation, medical care, and any other non-negotiable costs of living. Compare this with your income and find ways to fill any gaps.
3. See A Debt Counsellor
Have you been struggling to make your monthly payments? Debt can become overwhelming in the blink of an eye. A financial counselor might not be able to settle your debts for you, but these professionals are skilled at finding innovative solutions in unlikely places.
Your debt counselor will look at your financial situation with candor and evaluate your circumstances. You might be advised to look at debt consolidation to minimize your interest rates and reduce your monthly payments. You may even be fortunate enough to have a debt counselor advocate on your behalf to renegotiate your payment terms.
4. Learn Your Triggers And Find Ways To Manage Them
Do you tend to spend money frivolously? Does it feel like a compulsive habit you struggle to control? This isn’t as unusual as you might think, and it leads to a lot of debt for a number of people. Thankfully, there are many wonderful counseling services that are designed to help with just this problem.
While a debt counselor can help with the practical side of things, a psychologist can help you discover why you spend without caution and how you can change your habits. As you develop self-awareness, you’ll uncover your triggers, allowing you to safeguard yourself against them in the future. Just be prepared to learn some painful truths about yourself!
Finding Your Path To Financial Freedom
Carving a pathway out of debt can be challenging. It’s no small task, and figuring it out on your own can be challenging. Reaching out for help is an act of bravery and certainly one of the best ways to start practicing improved financial management in your own life.
