Are You in a Debt Crisis?
Do you find yourself mechanically paying bills with practically no income left? Do you dread picking up the mail each day? Are you paranoid about being hounded by creditors? These are clear indicators of a debt crisis, but do not give in yet.
Debt problems are common; the extent to which your financial health is affected by them is what we need to pay attention to. Learn to confront the situation, gear up and work on an appropriate debt management solution. Thinking along the following lines may help you arrive at a solution.
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How deep are you in debt?
Being unaware of the depth of your debt is more dangerous than the debt problem itself. Take stock of your finances, and make a note of all past regular and overdue payments. Do not just say, “I need money.” When you specify the need for cash, try to make an approximate estimation of the amount. Make a list of all the debts that need to be paid off in the shortest amount of time possible. Be aware of how much interest is paid on your mortgage, auto loans and bonds. Once you accomplish this step, you may start to feel better.
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Review your expenses.
Make a list of all your regular expenses. You should be able to assess the necessary expenses and the ones that seem extravagant. Consider the following points:
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Is it possible to increase your salary, perhaps by working overtime?
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Am I spending too much on my credit card?
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Can I save on gas?
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Develop a hobby to engage your leisure time more fruitfully.
These are just a few among many ideas you could think of to reduce expenses. Always remember that you are the best judge of your situation; no one else can step into your shoes to help you. Evaluate all those ‘leakages’ in money, and make attempts to plug each one of them.
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Think of options, choose one and take action!
After completing the two steps above, try to decide what you think will work best for you. There are a variety of options available to clear debts depending on the extent and type of your debt. Choose one that suits you best, or use a combination of solutions.
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Evaluate your plan periodically.
Your job does not end in just choosing a debt management program; you will have to ensure that it is implemented and that you are making progress. If you are still stuck, you may need professional help and should not hesitate to seek it.
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Be cautious in the future and be prepared for contingencies.
The process of recovery after a debt crisis is slow but certain with consistent effort and focus. Get a grip on your finances. You know how difficult it is to generate income and then lose it to paying off debts. Build on your assets by putting away some money every month. Never indulge in impulsive spending, and, most of all, avoid late payments.
It is never impossible to get out of what you got yourself into. Take charge, get the ball rolling and begin your crusade against debt today!
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