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Manage your Debt Problems with ease!

Having debt problems? You do not have to seek far for the source of your problems. Your spending habits determine how free you are from debt problems. Introspect a bit and you will realize that LaToya was absolutely correct when he asserted ‘Dipping into savings, borrowing from others, and using credit are the primary ways of spending more money than you bring in.’ So pause awhile and evaluate if you are heading for or are already enmeshed in a debt problem!

The classic symptoms are:

  • No savings
  • No equity
  • Using credit cards for routine purchases
  • Making minimum payments on credit cards
  • Having more than one credit card
  • At any given point of time you have utilized the maximum credit limit available
  • Your cheques keep bouncing
  • Getting frequent calls from creditors
  • Falling behind in your payments
  • Falling behind in your mortgage payments
If any or all of the above symptoms are visible, it is time to take stock of your spending and consider how you can retrieve your finances!

The first thing you need to do is to get rid of your credit cards or use them wisely. When you swipe your card you are creating a debt for yourself. It will have to be paid sooner than later. Leaving money in your wallet may come at a cost but you will not fall into the trap of debts. So begin by using cash for simple everyday expenses and avoid the card whenever possible.

Next make sure you keep strict account of all your income and expenditure. Record every dollar that comes in and every single dollar that goes out of your kitty.

Once that is done, analyze your spending habits and you will find a pattern emerging. Break wasteful spending habits and encourage habits that will help you pay off your debts and lead a happy debt free life.

If despite all this you are still falling behind on payments, be brave and call your creditor and explain the circumstances. You will find that most creditors are willing to 'Workout' with you on your payments.

If you have multiple loans, consolidate them. The consolidation apart from shocking you on your indebtedness will help you evaluate what you need to do to get out of your debt problems.

Other ideas you could try

  • Pay more than the minimum balance to the credit card company to help you gradually liquidate the debt.
  • Use only cards that carry a low interest rate.
  • Move the balances from high interest rate cards to low interest rate cards.
  • Use your savings to clear out your debts.
If you can implement any or all of the above, you will find yourself rejoicing a debt free state very soon. So happy planning for a debt free life!

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