Life Comes First- Repaying Debt Second

Below is a guest post from Amy Matt.

My name is Amy Matt. Sharing my experiences on managing finances and exploring more about this is my passion. I am happy to be a guest here today.

Getting out of debt and enjoying your life in the process may seem like an unrealistic goal, but many people find that with careful planning and some changes to their expectations, it is by no means impossible. Although you might prefer to hide yourself away from the worry and stress, no debt problem is unbeatable. That’s not to say you’ll find quick fixes or short cuts to get you there, but the sooner you begin to take on the task of managing your debt, the sooner you’ll be in control.

How did you arrive here in the first place?
None of us plan to get into game changing debt, but analysing your reasons for doing so is a major step in breaking the cycle and ensuring you stay in the black when your finances are back on a level. One of the most common factors in accumulated debts is spending beyond your means, if this has been an issue for you in the past now is the time to learn some discipline! Budget religiously and look for pleasure in low cost activities like walks on the beach or nights in with friends. You can’t have it both ways and in order to cut your debt, the more frivolous areas of your expenditure will have to be downsized  Forths forensic accountants really helped me out when I was stuck under debt.

Steer clear of consolidating loans; don’t acquire new debts to solve the existing ones
Getting a larger loan or maybe adding onto a mortgage can often seem like the perfect solution, the interest rates are lower and the term is longer, eliminating that persistent pressure to replay what you owe. However, this can foster a false sense of security; giving even people with significant debt problems the feeling they have a clean slate. In time, new credit cards and new debts can start to accumulate, leaving both a new and an old debt to clear. Consolidation is a risk, it’s only a good idea if you feel you’ve exhausted every other option and your situation is dire. For debt free advice and consultancy, the most reliable ones are Abacus.

Get on top and stay there
Once you’ve got back into the driving seat, make sure your personal finances work for you by micro-managing your income and expenses. It may seem tedious at first, but by following a few simple steps, you’ll avoid falling onto a viscous circle of borrowing and repaying. You’ll need to change your attitude to money, stick to a budget and live within your means; if you don’t have it in the bank, you can’t spend it.

Open a high interest account and start saving like you mean it
It’s always best to clear your debts before embarking on a savings fund – paying interest will far outweigh the benefits of squirreling away a nest egg. However, once the time is right, taking an amount from your wages each month and stashing it for a rainy day will help you cope with the unexpected. You’ll also gain a sense of responsibility and be able to plan for larger purchases, like a house or car.

Living a debt free life is a distant dream for most people, so don’t allow your financial problems to make you feel isolated. Speak up and speak out, ask for expert help from your bank if necessary, devise free, fun activities with friends and broaden your knowledge by sharing money saving stories with those close to you.

 

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