Having a lot of debt can feel like the financial equivalent of being in prison, or a financial disease that spreads through one’s financial life. Everyone wants to break free from debt and build their credit from scratch, and the great news is that in most countries there is the opportunity to do this via legal channels such as insolvency arrangements and bankruptcy.
See, everyone deserves a second chance when it comes to managing their finances, but if you’re in a position where you feel like you are sliding down the slippery slope that is debt in a way that feels out of control then all you want is to get a sense of stability and certainty back in your life, rather than worry due to all the negative emotions and stressful procedures associated with being in debt, but most people don’t want to resort to bankruptcy and would prefer to avoid this at all costs.
However, the challenge with debt is that it’s not just a practical solution, indeed if it were then we would all be doing what it took, as getting out of debt isn’t a particularly complicated thing to do on a logical level, but unfortunately, our emotions take over.
People often over complicate the process of breaking free from debt as their emotions take over, and they allow the situation to control them rather than them controlling the situation, as they go into a state of reaction rather than response – meaning they are reactive to the situation rather than responsive… and a lot of times people will react by burying their head in the sand and hoping the situation will go away, even though they know it won’t.
We are however, emotionally driven creatures and our emotions at times like this can control our behaviour to the point we feel like we aren’t in control.
The challenge with debt is that it’s often it’s a slippery slope, as due to the interest and late fees, once you start missing a few payments your financial position can very quickly deteriorate and go downhill. The fees compound and before you know it, the amount you’re paying each month isn’t even scraping the surface of reducing the debt; it’s just paying the fees the finance company keep applying.
It’s understandable that people in debt often feel so overwhelmed they feel no other choice but to bury their head in the sand and avoid the situation; but this avoidance is when things start spinning out of control.
This article therefore looks at two fundamental and very simple principles in terms of breaking free from debt; the first is to consolidate and the second is to increase your income.
The idea of consolidating debt is often a good way to go, for this way, you will now be paying just one manageable monthly amount at a relatively low rate of interest compared to the exorbitant fees that short term borrowing attracts, or the fees that can spital out of control when we miss payments.
One option to consolidate your debt is to put it onto a zero percent credit card, and then pay this off each month, before the interest free period ends though many people visit sites like flying homes to assess how much their house is worth, as this way, they are then in a more informed position to remortgage their property if necessary in order to pay off their high interest debt.
The main benefit with debt consolidation is that it can ease the emotional pressure of being pursued for debt and reduce this stress faced by having multiple creditors chasing you for money. In short, a debt consolidation loan can provide a great way to get back on track.
INCREASE YOUR INCOME
The second strategy is to stop focusing on debt and start focusing on bringing moe money in… see, all too often people are so focused on debt that they lose sight of the fact they have control over their finances, and do have the option to increase their income, the focus on debt reduction takes over their life when it might be better to focus on wealth creation strategies as this is the only way you will truly dig yourself out of debt.
Essentially, if you can shift your thinking away from debt and more toward generating income then you’ll be in a much better position to get out of debt. There are many ways to make an extra income, but unless you lift your head up from looking down at the shackles of debt that are around our feet then the opportunity to break free from debt and start moving toward financial stability will pass you by.