Ah, the old ‘D’ word.
Enough to make even the toughest skin crawl and the driest eyes weep.
Debt is a sensitive area to address even at the best of times. It’s a slippery slope that we often don’t realize we’re in until its far too deep.
Thankfully, through a bit of thought and effort even the most dismal of debt situations can slowly be rectified. We’re not saying overnight, but over time you’ll breathe easier and enjoy the feeling of a slow progression upward; rather than the opposite.
Be Sure of the Numbers
It’s easy enough to feel the debt, to claim to be in debt and to believe you’re in debt. But very often people shy away from taking a look at the actual numbers in fear it will make them feel worse than they already do. They accept the estimates in their head and carry on as normal.
This isn’t going to cut it, unfortunately. If you’re serious about getting out of debt then you need to be serious, and certain, about the numbers that you’re dealing with.
Set time aside to sit down and figure out how much debt you really have. More often than not it’s worse in your head than it is on paper — so don’t be scared to take this step.
Some tips for breaking down debt into an understandable format:
- Use tables and spreadsheets where possible
- Divide your debt into sections based on each account
- If you’re dealing with a paper trail, make use of folders and dividers in order to organize everything properly
Isolate Problem Areas
Once you’ve done the above and have managed to break the numbers right down to an understandable estimation it’s time to isolate the precise areas of concern.
Usually by back tracking through your spending history it becomes quite easy to pin point places where your bank account took the largest hits. If any of these incidents were repeated, it’s likely you have a problem area on your hands.
With more severe cases of debt there will be more than a few problem areas to be addressed. Milder debt will likely stem from one, two or three areas that have caused repeated damage over a period of time.
In any event, finding and making yourself aware of said areas is your golden ticket out of this hole.
When you think you’ve detected a problem area, ask yourself:
this incidentof spending 100% necessary or could it have been avoided?
- Did I have a choice, at the time, to find alternate means of making this payment?
- Has this been a recurring incident in the last three/six months?
- Can I write this off as a definite problem area in terms of my own financial situation?
What is the old saying? The first step to accepting defeat is taking accountability. Something like that.
Through isolation of your personal problem areas when it comes to spending you’ll be taking the first step toward accountability for what has going on. The next logical step is action.
Moping about your debt will only get you so far. At some point you need to accept your role in what has happened and begin making plans to move forward.
First things first: always keep in mind that what you have been doing thus far hasn’t been working, so logically something need to be done differently.
There are a few targeted forms of action that you can take immediately to begin turning the cycle around. Let’s break down a few of the most important ones.
Cards Gotta Go
We can’t stress this enough; your credit cards have got to go!
Melt them, chop them, tie them to rocks and throw them overboard; do what you need to do, but get your spendthrift self away from any form of plastic that could charge a bill.
For many, this is the step they struggle most with. The thought is that they’ll just keep the card but they won’t actually use it anymore. Yeah right!
If this was your initial thought as well then you need to cut those cards sooner than you think. This is simply not the nature of credit spending and not something the human mind is able to grapple when it comes to moments of desperate need.
Cut them up!
Cut Down Expenses
This is another relatively easy way to start turning the debt spiral around.
Your expenses should be clearly laid out with cost estimates next to each item. Take time to then look at and consider each one to find ways you could minimize the cost.
Even if it’s not by a lot, cutting each expense by a few dollars adds up in the end and that money can go toward covering the existing debt. In turn, you will also be accumulating less debt and slowly the cycle will reverse itself.
Find Alternate Income
A third way to begin bringing things back into harmony would be to source an additional form of income during your debt rectifying period.
Having an extra flow of cash from an alternate source that you wouldn’t usually have is a big help in bridging the gap between debt and debt-free living.
Consider waitressing in the evenings, or sell some old stuff cluttering the house — get creative!
Yes, you’ll have less time to yourself but it’s not forever. The goal is to be free of the big D and once that happens you’ll go back to regular life without the stress that loomed before.
Debt is draining; excuse the pun. Physically, emotionally and mentally.
Getting on top of your debt problem is something you want to do sooner rather than later and when it’s all over, you’ll thank yourself for doing it.
Are you ready to take it on?