Being in a large amount of debt can be stressful for you and your family. If you’re feeling worried about something, it’s highly likely that your children will pick up on how you’re feeling, and become worried themselves (even if they don’t know what it is they are worrying about). Plus you won’t be fully present and engaged with them (or anyone else) if you are constantly worrying about the money you owe. The good news is that there are a number of different ways to deal with your debt and get yourself and your family back on track.
Don’t Hide Away
It can be tempting to just hide away from the problem and ignore it, but that is a bad idea. Whether you owe a lot or a little, acknowledging that amount and looking for ways to sensibly pay it back and deal with the issue is always a better thing to do than pretending there is no debt. If you do this, you will find that the initial problem just gets bigger when it didn’t need to.
The best way to begin is to take a look at your bank statement and see what you are paying out and why. Once you know this, you can work out how much you owe each debtor, which means you can write a list detailing these amounts, and the interest you’re paying on each one. This allows you to prioritize your debts, paying off the ones with the highest interest first, even if they are the ones with the smallest amounts owing.
Remember, debt is not necessarily a bad thing, but if you don’t handle it properly then it can become a problem. Knowing what you owe and having a plan to pay it back will make everything a lot easier.
Make A Budget
If you are in difficulties with your debts, then you’ll need to look at how much you can realistically pay back each month on each loan or card. Speak to the companies behind the amounts and suggest the amounts to them. If they don’t agree then you will need to negotiate, but for a lot of the time the companies will say yes – they would rather get their money back slowly than not get it back at all.
At the same time as doing this, it’s the perfect opportunity to assess your spending habits. If you’re paying for takeout every week, for example, then you might be better off putting that money to one side to pay off your loans more quickly. You could take a homemade lunch to work instead of buying something every day. Or perhaps you’re paying out for membership of a club or a gym that you never attend. Find a pay as you go option and save yourself some money.
Change To 0% Interest
If you have bad credit, then changing from your current credit card to one with zero percent interest charges won’t be possible. However, if your debt is not too bad, and you simply want to save some money (or pay your card off more quickly) then changing to a different card with a zero percent interest rate will certainly help (and you can find out more here).
There are two ways to enjoy the benefits of a zero percent interest card. The first is that you won’t be paying so much money per month if you opt to pay the minimum amount required. That will leave you more money spare to pay off your other, higher interest debts instead. Alternatively, you can continue paying the same amount each month as you were paying before, and because you are now only paying the balance and not the interest as well, your debt will be paid off much faster than it would have if you didn’t switch cards.
Look At Your Overdraft
Your overdraft is something that you might not even consider as being debt, but every time you use it, you are using money that the bank has effectively lent you on a short-term basis. In some cases, the interest charged when you go into your overdraft can be very high indeed, and because it tends to come out a month or so after the use of the overdraft, you might even forget that you need to pay it until you see there is money missing from your account.
Not all banks charge the same when it comes to their overdrafts, and if, when you find out what the interest rate on yours is, it seems particularly high, then it could be time to switch banks to somewhere that doesn’t charge as much. Sometimes you can even be given a cash incentive to change bank accounts, which will also help you to pay off some more debt if you have any.
If you have many different loans and credit cards and keeping track of them all of becoming a difficult job so that you sometimes miss a payment, it’s better to consolidate them all into one new loan. Add up everything you owe and apply for a loan for that amount. When you receive your loan money, you will be able to pay everything off and cut up your cards. You’ll be left with just one payment and, because you’re able to spread the loan out and search around for a good interest rate, you could even be saving money each month, allowing you to enjoy your life without worrying about your debt.
Ask For Advice
If you’re really struggling or you’re worried that you might not be able to cope financially, then speak to someone about your debts and you’ll find that the problem is not as bad as you think; there is always something that can be done. Speak to friends and family for advice, but if you need some professional help then get in touch with someone who deals with debt for a living. They will be able to come up with lots of ideas to put you back on track.