Going through debt and successfully paying it all can really be a tough ordeal. In fact, more often than not, people who succumb to debt tend to break down and end up with more debt. If you don’t want to suffer the hardships of being in debt, then be sure that you will be reading this article up to the last word.
Yes, managing and controlling your debt is a really hard thing to do. However, given enough research and strategy, you will be amazed how much simpler it will get. The key to managing debt, as the same with all stressful problem, is always discipline and knowledge. Before you battle it out, you must prepare beforehand by studying all the related and necessary information and formulating a strategy that you will stick through until the end.
With that in mind, here are 4 ways that you can win your battle against your debt.
- Be very clear on how much your debt is
Acceptance is key to solving any problem. You can never solve, much more, manage a problem if you don’t acknowledge its existence and severity. So, before you go into dealing with your debt, you must first to know how much you owe – the interest rates, the due date, the conditions and other related information. All of these facts will play a vital role in your strategy to managing your debt.
- Negotiate with your creditors
The next thing that you need to do is to approach your creditors and negotiate a good deal that will be ideal in your situation. You must make them understand that you are running low and need some leeway in order to pay them. Never ignore or avoid your creditors, the more you damage your relationship with them, the worse your problem gets. It is always best to be sincere about your current financial situation to your creditors. Do not be afraid of approaching them, remember, it is their money that is on you, thus, they will be more than willing to adjust the terms of your debt if it means that you will be able to pay them.
- Control your expenses and save more
If you are in debt, it goes without saying that you should reduce your expenses. If there are luxury items in your budget, then it might be better for you to cancel them or postpone them until your situation improves. Review your regular income and also your monthly budget and make the necessary adjustments.
As for savings, most people tend to save only after spending a portion of their money. This practice isn’t actually ideal. According to financial experts and even saving advocates, people should always take a portion of their income and set it as savings the moment they get their income, e.g. salary. The remaining portion then will be the one that must be carefully budgeted in order to pay for the expenses.
- IVA or Individual Voluntary Arrangement
If worse comes to worst and you are on the brink of declaring bankruptcy then you might want to try going for an IVA or Individual Voluntary Arrangement. An IVA is an agreement between you and your creditors that will give you enough time to pay what you can only afford over a fixed period of time. IVAs are administered by a licensed Insolvency practitioners which ensure that both parties walk away with the best deals. IVAs usually last up to 5 years and will freeze and forego the interest payments and other similar fees during its implementation.