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Facing debt is never enjoyable. However, feeling sorry for yourself won’t improve the situation.
Thankfully, though, there are several sources of optimism that may put you in a better frame of mind. Better still, when you use this info to guide your future decisions, your hopes of building a better financial future will improve. Here’s all you need to know.
1- Not All Debts Have To Be Repaid
The first step to regaining control of your finances is to get organised. Working out exactly how much money you owe to creditors may highlight that the situation isn’t as bad as you think. And even if there is a mountain of debt to be repaid, you may find that some can be written off.
Student loans are a great example of a debt that may not have to pay off. Or at least, you might not have to repay it all. Check out moneytrumpet.co.uk/when-are-student-loans-written-off to learn more. Financial advisors may also be able to negotiate reduced repayment terms with your creditors. Companies would rather gain something rather than encounter bad debt.
Alternatively, if the situation is unsalvageable, bankruptcy is an option. However, there is no doubt that this should be viewed as a last resort.
2- Debts Can Be Consolidated To Reduce Your Payments
For many people, the main source of money problems doesn’t come from the money that has been borrowed. Instead, it stems from the interest that is incurred over time. If you feel as though you are drowning in a sea of high interest, the good news is that you can often trim these costs down.
If you can find a consolidation loan with a lower APR than existing debts, it will instantly improve your situation. As well as paying creditors, you may wish to consider your credit card debt or overdraft. A balance transfer card will buy you time to avoid interest for several months. In turn, this will allow you to clear the debt more quickly.
On a side note, you should make a conscious effort to ensure that minimum payments are made in a timely fashion. This will ensure you avoid fines.
3- You Can Make A Difference With New Habits
The fact that you’ve found yourself in debt confirms that something needs to change in your life. While this can be quite a hard pill to swallow, the great news is that simple changes often yield huge results. Better still, making a conscious effort to boost your situation starting from today should bring quick benefits.
First and foremost, this guide to cost-cutting strategies will open your eyes. Not every tip will be relevant to you but almost everybody will find that changes can be made. Aside from the direct financial rewards gained from trimming the fat from your expenses, it allows you to develop a strong mindset. In turn, this encourages further upgrades.
Once you start to see the benefits of new spending habits, you’ll find it easy to keep them up too. Start now, and you’ll never look back.
4- Earning More Money Is Possible
Clearing your debts will become a lot easier when you have more money coming in. The quickest and most significant way to boost your earnings would be via a job promotion. If you feel you are deserving of this, speak to your boss. If this doesn’t work, applying for new jobs may be an alternative.
Climbing the career ladder may take time, though. In the meantime, there are plenty of side hustles you could consider. Check out https://financiallyindependent.me/make-money/make-extra-money/side-hustle-ideas-uk/ for inspiration. The key is to find something you enjoy that also fits around your schedule.
In some cases, side hustles can evolve into primary sources of income. Either way, though, using the extra funds to clear I’m your debts will aid your cause.
5- All Progress Is Good Progress
Even if you implement all of the ideas above, it may take years to become debt free. Do not let this deter you, though. As long as your financial health is moving in the right direction, you should be happy. Not least because you can continue to make further improvements for a quicker journey.
To do this, though, you must ensure that your situation won’t get worse. Commit to not using store cards or taking on avoidable debt. Consider selling unwanted goods. Say no to lending money to friends. And be sure to avoid wasting money in daily life or on bigger purchases. In short, you need to live within your means.
As well as helping you get out of debt, it will teach habits that allow you to stay out of it. The road to financial stability starts now.
