What happens when you think of debt? Sweaty palms? Racing heart? Well, that’s perfectly normal. According to the American Psychological Association (APA), financial problems are one of the leading causes of stress in Americans. Although the APA regards the stress caused by financial problems as normal, you should not hesitate to take control of your debt. After all, it’s your future at stake!
Don’t Let Your Debt Drag You Down
Is your debt dragging you down and making you feel helpless? Well, you’re not alone. The good news is that with a dose of self-discipline and self-control, you could potentially lose the nefarious grip of debt on your life. In order to do this, you need to manage your debt in parts. The first part is all about making sure that your debt doesn’t drag you down and following is how you need to go about it:
1. Control Your Urge to Spend
This is easier said than done. Whether you’re at the mart or shopping through e-commerce sites, there will always be someone enticing you to part with your hard-earned cash. You all have the right to spend your hard-earned money. However, if this habit spirals out of control, you’ll soon be buying on credit, which, in all likelihood, will lead to debt. Don’t let this happen to you.
2. Avoid the Debt Trap
Debt is not exactly evil, but it can cause a lot of problems. When you accumulate debt, your finances begin to call the shots. Your debt tells you to stay where you are in life, like a dead-end job, because you can’t ‘afford’ to explore. Debt stops you from exploring new horizons. In doing so, it suffocates your chance to start afresh without any debt or burden. Here is a proverb that fits the situation perfectly:
“The rich rules over the poor, and the borrower is the slave of the lender”
With debt, you’re not just a slave to your borrower, but also to your circumstances. When you have debt, your circumstances or more specifically the debt itself, dictate what you should and shouldn’t do. You’re no longer in control. Debt controls you, not the other way around. Debt weighs you down, affects your relationships, and prevents you from taking control of your financial future.
Take Control of Your Debt
Don’t want the above things happening to you? Then, you must take control of your debt. How can you do that? With the following steps:
1. Taking Control of Your Debt Starts with a Lifestyle Change
It’s true that your debt can cause you sleepless nights. At times, your debt may seem bigger than you. However, no matter how big your debt gets, you can always manage it better and take control over it. This is because you can control your debt or even reduce it by tweaking your lifestyle and managing your finances better.
2. Do the Math
Credit cards give instant gratification, especially to those who want something they can’t afford. However, if the interest rates are high, this debt can weaken your ability to save. This can cost you dearly if you continue to carry a balance. Too confusing? Maybe you’d want to learn more.
3. Live with a Budget
No, no one’s recommending that you live like a destitute. However, living with a budget will help you to get on track and stay there. A budget can help you track expense and divert more money to saving or paying off your debts. If you want to get out of debt fast, then developing a budget that tracks your income and expenses is crucial. This will allow you to know where you stand financially.
With a budget, you’ll know whether you have a surplus or a deficit. The goal is to move towards or increase the surplus, so you have enough money to pay down your debt. This should be your ultimate objective. You can achieve this objective by living within your means and sticking to a budget. Monitor your budget will make that easier.
Take Control of Your Spending
The best way to save money i.e. the money you can use to pay off your debts is by controlling your spending. However, controlling your spending isn’t as easy as it sounds. This is because spending money on things we need or want is a big part of our life. No matter how hard you try to abstain from it, you will eventually spend. However, what you can do is curb your spending by keeping track of your spending. This is what you need to aim for and the following are some ways to achieve it:
1. Improve Your Spending Habits
Good spending habits are as important to financial well-being as saving money or getting rid of your debt. Yet, most people rarely think about how and where they’re spending their money. You don’t accumulate debt by magic or overnight. Instead, you accumulate it by often spending beyond your means and on things you can’t ‘afford’ to buy. While a little bit of debt is unavoidable, you should not allow it to spiral out of control. However, you can only do this by making a conscious effort to control your spending.
2. Buy What You Can Afford
Do you spend a lot of money on things that you don’t really have the means for? If you’re guilty of this, then stop now! There are some situations where we have no option but to get into debt. However, there are also many situations where we have a choice. In such situations, you must not let your desires take charge of you because if that happens, debt will be unavoidable.
3. Spend Smarter and Your Money Will Last Longer
Start spending smartly and your money will last longer. So, how can you optimize your spend habits? By doing the following:
- Prioritize spending based on what’s important to you
- Research before you shop
- Avoid your spending triggers
- Find an accountability partner
- Develop patience
- Look for saving before you buy
No one wants to swim in debt, but it happens. While being in debt casts a shadow, the real problem occurs when you start drowning in it, which is no less than a nightmare. If you don’t do the right things, then whatever you do to lower your debt may actually pull you further underwater. The good news is that you can lower your debt and avoid bankruptcy by spending smartly and making a few alterations to your lifestyle. The steps to do that are detailed above.
