No matter how much we try to avoid it, most of us will incur debt at some point in our life. And sometimes, the only way we can have something is to acquire it through debt, be it an education, a car, home or business. Although normally seen as a negative, sometimes it is a necessity that helps improve our life condition and enables us to accomplish things.
While there is still stigma attached to having debt, it is now considered more normal because of modern society’s reliance on student loans, credit cards, and personal loans. According to a 2018 survey, the average American is $38,000 in debt, excluding home mortgages, which is $1000 more from the 2017 results. Credit cards and mortgages are tied as the top source of debt, and the same study also found that fewer people this year agreed to being debt-free.
It’s important to remember that there’s nothing wrong with being in debt and it’s nothing to be ashamed of, especially if it’s for your personal development. However, if a debt is not monitored and managed well, it can easily get out of control and become a huge problem that hinders you from staying afloat.
Know how much you owe
The first step in taking control of your debt is knowing how much it is. Make a list of your debts, from the smallest to the biggest amount. Having the full amount you owe in front of you will let you see the clear picture and will serve as a reminder to deal with it as soon as possible. Revisit this list from time to time and update it every time the amount of your debt changes.
Create a calendar to pay on time
In order to slowly become debt-free, discipline yourself to repay what you owe in accordance with your debt agreement. Making a calendar of your payment schedule will help you prepare for the expense. Make it a point to pay the minimum fee every month in order to avoid incurring additional payment for late payment.
Get help if you are struggling to pay
If you have concluded that you can’t afford to pay all your debts on time, you need to admit the fact early and take action quickly. Consider talking with your lenders and convince them to give you some leeway. If that doesn’t work, perhaps it’s time to explore the option of getting help from debt relief companies. If you feel like your debt is out of control and is way over your income, declaring bankruptcy is one way to manage this financial situation. Ask your attorney about Chapter 13 Bankruptcy which is the most common type for individuals. Chapter 13 is less about eliminating your debt but is more about developing a plan to repay all debts by proposing a repayment plan that lasts for three to five years.
Being in debt can be a challenging and debilitating experience. Repaying the amount of money you owe takes a lot of discipline and sacrifice, but taking control of your debt and being able to live a debt-free life will all be worth it in the end.