Debt is a major source of stress for people all over the world from all different backgrounds. The uncertainty around the pandemic made things even worse for many people, who don’t know whether they will be able to pay their bills in a few months’ time. An incredible 77% of Americans feel anxiety because of their financial situation.
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If you’re in this situation, it’s important to realize that you aren’t alone, and you shouldn’t be ashamed. Not everything is in your control, but there are steps you can take to reduce the burden of debt in your life. It can be a tall barrier standing in the way of your happiness, and it doesn’t need to be. Small steps made consistently over time will help you to come out stronger on the other side. It can be done, and you are capable of doing it.
Ten Ways To Make Your Debt Easier To Deal With
In this article, there are ten ways to make your debt easier to deal with.
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Consolidate Your Debt
One of the most stressful parts about debt is that it’s usually spread out across multiple providers. Bills can come out at all different times of the month, which makes it easy to feel overwhelmed and harder to keep track of whether you have enough money at any given point.
Consolidating debt means you only need to pay one company rather than several. You essentially take out a loan that pays the other debts. Consolidating debt makes payments more predictable and allows you to create a schedule, so you feel more in control.
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Unsubscribe From The Unnecessary
Subscriptions you’ve forgotten about might be sabotaging your financial health by silently adding to your expenses every month. In fact, in America, 84% of people underestimate how much they spend on subscriptions. If you can cut some of these out which you aren’t using, you might find it makes a big impact on how quickly your debt is increasing. Watch out for annual subscriptions, as these can often be large and cause disproportionate pain in the month they fall.
It’s best to be ruthless with what you subscribe to. If you cancel, you can always choose to resubscribe at a later date when your financial health is more secure.
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Cook At Home
Social media is now full of “foodie” accounts of people who seem to constantly go to expensive restaurants and post pictures of what they eat. This can easily trigger FOMO but avoid eating out as much as you can. Your bank account will thank you. A few meals out can be more expensive than a whole month of eating at home, as well as being worse for your health.
You don’t need to completely avoid the odd treat meal out, but it shouldn’t be part of a regular routine. You may be trading financial security for the short-term convenience of having dinner cooked for you.
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Prioritize High-Interest Credit Cards
Not all debts were created equally, and delaying the payment of some can be far worse for your financial health than others. You should order your debts by what is costing you the most each month in interest and focus on paying this debt off early.
This is called the avalanche method because you go straight for the most damaging debt, rather than working your way up as in the snowball method. While both methods work for different people, the avalanche will get you out of debt faster and minimize the total interest you pay.
The avalanche method, where you get rid of the debts that are the most expensive first
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Sell Some Things
An easy way to reduce acute pressure is to sell something which you don’t need. We often have things in our houses that have reasonable resale value and hold little meaning to us. If you have jewelry or decorative items that you are willing to part ways with, it can buy you extra months of time to get everything else in order.
Reselling clothes has become more popular in the last few years through sites such as Depop and eBay. You can also use these sites to buy cheaper used items and save money that way too.
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Quit The Gym
Gym memberships can be extortionately expensive, especially if you aren’t making the most of the facilities. You can easily work out for free at home, and there are a huge number of free YouTube and Instagram accounts offering professional quality tips and tricks. You should look out for body weight exercises, as you can do these without paying for expensive equipment.
The idea of a dedicated gym is a relatively new concept. For most of human history, people kept fit through their daily activities instead! Cutting the membership could give you extra money to pay off your debts faster.
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Have An Emergency Fund
Knowing you have an emergency fund can be a powerful way to ease financial anxiety. Living paycheck to paycheck means you are always worried about what will happen if expenses are larger than expected. Yet, knowing you have saved up to the state where you can last at least a few months without any income removes this worry completely.
Some people lack job security, and they worry about what would happen if they lost their job. Again, an emergency fund can reduce the intensity of the emotions, which allows you to think more rationally on how to create a plan that works for you. The last thing you want when paying off your debts is to not have any money for emergencies, then need to go into debt again.
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Seek Free Entertainment
The average American spends 8% of their income on entertainment, which forms a significant part of their discretionary spending. It’s an area ripe for savings for many people, as there are often free alternatives they could enjoy just as much.
Many lifestyle magazines such as TimeOut will provide local guides for what you can do on a budget in your area. Nobody wants to live a boring life whilst trying to get out of debt, so it’s crucial to look for free activities that can stop you from feeling the need to splurge.
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Consider Switching Companies
If you are currently working but still in debt, it might be time to consider whether it’s in your interest to change your company. The average salary increase from switching jobs is greater than those who stay in the same job. Otherwise, you’ll need to try to negotiate your salary with your employer which can be uncomfortable.
It’s important not to inflate your living expenses if you manage to secure a salary increase and instead use it to pay down your debt. This can help you escape the vicious cycle.
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Speak With A Professional
No matter who you read online, they won’t know your specific circumstances and challenges. If you think the mountain is too high to climb then be sure to seek out professional help. You can often get a free consultation for your first meeting which allows you to decide if the person is the right fit to help you reach your financial goals.
The accountability a personal advisor brings can keep you on track when your motivation begins to wane.
