How to Overcome Debt

L  What is Debt: Borrowing money from credit card company or in the form of bank loan or from your near ones is what you call as debt.

L     How to Overcome Debt L

Financial crisis leading to debt hurts badly whether it arises due to uncontrollable events like illnesses, thefts, job loss etc. or due to your own mistakes such as over expenses, buying expensive things etc. But have you ever thought that; careful and proper management of finances can help in overcoming the debt. If the feeling of “I’m in IN DEBT” is bothering you and giving sleepless nights then you should look forward to overcome debt in positive way instead of running away from it and delaying the repayment.

A   Steps to Clear Your Debt A

The first step is to identify whether you’re in debt. So here are few signs which can tell you:

1)  Delay paying monthly bills for credit card, utilities etc.

2)  You pay only the minimum payment required by the credit card.

3)  You have reached maximum limit on all your credit card.

4)  You keep on getting late payment notices from your bank, Credit Card Company.

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J Contact Your Creditors: Contact your creditors and ask them to provide solution for repayment plan which would be feasible for you. If you have been a onetime payer previously then creditors will listen to your story and extend the time frame and cut short your interest.

J  Cut back on Expenditures: Your spend should always be lower than your savings. Always set aside small part of savings aside and then use the remaining money for your everyday expenses.

J  Enlist all Your Debts: This is most important step in overcoming your debt. List down everything credit card bills, loan payment, etc. And first make a plan for paying the debt for the things with highest interest rate.

J Save Money on Lifestyle Changes: Sell expensive items or unnecessary things such as if you have multiple cars, then you sell one of these. If you’re a party-gore, frequent traveler and spend heavily on food, club etc. then straight away stop this. Even small changes such as changing your cell phone or internet plan, cutting cost on petrol/diesel by switching to bicycle/walk can save good money.

J  Switch to a High Paying Job: To overcome debt, look for ways to increase your earnings. And one of the best solution is to switch job to a high paying one.

J Look for Secondary Income: Look for secondary income sources with zero/very little investment but beware of fake money making schemes. Instead, if you are subject matter expert then you can offer online training for a fee.

J Compare and Buy: You get everything at discounted rate these days. So before buying anything, compare rates for the same on the internet and save money.

J  Credit Counseling: If you are severely indebted and on the verge of going bankrupt then reaching out to a credit counselor is the best solution. Make sure you have face to face discussion with them and get everything in written. They’ll carefully layout a debt repayment plan and solve your money problem. In India, few banks have taken initiative and started following credit counseling centers:

Grameen Paramarsh Kendras (initiative by Bank of India)

So a right and careful planning towards overcoming the debt can help in further damage control and help you clear your debts.