Most people are well aware that they’re facing financial hardships. If you’re paying for things with either a debit card or cash then you don’t really have any other options when the money is all spent, you just have to stop spending even if you absolutely have to, such as for bills etc.
Credit debt is a different game altogether. You can kind of contort your view of your financial situation because you’re not instantly paying for things. And when you also take into consideration the fact that you’ll mostly only need to make monthly payments smaller than the amount you have spent, it is easy to see how spending using a credit card can become uncontrolled and disorderly.
Debt alone isn’t the issue; it is when the debt is greater than what you can manage that it becomes a big issue. And it is easy to see how the differences blur.
Here are some common warning signs with debt:
- You can only afford to make the minimum payment
- ou are paying one debt with another; you are making transfers and paying for necessities like utility payments on your credit card because that’s how they can get paid
- The debt collectors are after you: this happens only when you start to miss payments
- You have a large monthly payment, and it ends up accounting for around 20% of your monthly income, which doesn’t leave much for rent and food.
- You don’t have any savings; you don’t even have an emergency fund. This is a big problem as you will find yourself in even more trouble if your get stuck in an emergency such as your car breaking down.
- You take a cash advance on your credit card which shows you aren’t managing your money properly and this leads to more debt and there’s also a fee that comes along with this.
- You don’t budget or really have an idea of how deep in debt you are.
If you feel any of these signs apply to you, contact us for further help and guidance. There are also a few things you can begin doing now to help you out financially.
- Contact creditors: These guys don’t want you to stop paying so they will want to help you. Explain your situation and see if they can perhaps lower your interest rate or come to an agreement on a payoff amount. They may have some options available. There are no guarantees but it is worth a call or quick visit.
- Figure out your financial situation: Before you can do anything, you need to know where you stand. Write down all your debts, how much you owe and your total balance as well as other payments for rent, food, and utilities so you know how much is needed each month. Also figure where you can lower your expenses and how much you can put out for the various accounts.
- Find ways to make some extra income: Sometimes it is not easy to cut spending, especially if most of it is absolutely necessary, so the next option is to discover ways to bring in some extra cash, this will help you pay off your debts faster. Browse our blog for articles on how to make extra money, we have quite a few!
- Consider getting a credit counselor: These guys are educators and will give you good advice and help you come up with a debt management plan and help you get your creditors to lower interest rates. This is free so do take advantage of it.
- Whatever plan you end up coming up with, stick with it! : This is the key to almost anything but it is especially important here. You are required to stay consistent. Find a repayment plan you know you’ll be able to stick to. Start now. Take control of your debts immediately and you’ll be on the path to becoming debt free sooner.