Debt: Break the Cycle
How to use debt management to gain financial freedom
Too often we find ourselves living from pay check to pay check, hoping that we can service our mortgage, car loans, micro loans and afford our living expenses. When an emergency arises, we are unprepared. The ideal is to have the minimum debt, like your home loan or another low interest loan, and being able to save for emergencies.
When we don't save, we have to turn to borrowing money or using our credit cards for unforeseen expenses. Wouldn't it be great to turn your life around so you don't have to worry about making it through each month?
Being saddled with debt that you cannot handle will keep you from reaching a point of financial freedom. When we worry about debt all the time, we don't plan beyond the debt because it's such a mountain in front of us. It's best to forget about debt to the extent that you so can mobilize yourself to find ways to overcome it and not just manage it.
But what to do? How do you put debt to the back of your mind long enough to work towards your financial freedom?
When you are running around trying to make ends meet and wasting energy on worrying about debt you are wasting time and energy you could have spent focussing on saving and earning more money. It's not just about getting another job, as this post explains. Free up time and energy by finding the best form of debt management for you. This can be in the form of a consolidation loan or debt review, depending on your financial situation.
Debt consolidation frees up time and energy because you consolidate all your smaller loans' repayments into one. You have to apply for a new loan and pay back all your smaller loans. You can save money if you get lower interest rates. This is often the case, because smaller loans tend to have much higher interest rates than the secured loan you want to consolidate with. You can save money further if you cut up your credit and store cards so you're not tempted to get further into debt.
To qualify for a low interest loan big enough to cover your debt you can't be too far in debt to start with, which makes this form of debt management problematic if you're struggling to make ends meet.
If you opt for debt review, you get the help of a debt counsellor. You have to be over indebted to qualify for debt review and it doesn't matter if you're blacklisted, as long as the debt counsellor can prove to your creditors that you cannot afford your repayments. They will then approach your creditors and negotiate a new repayment plan that frees up enough of your salary to cover your living expenses. Like with consolidating your debt, you only pay a single repayment to a Payment Distribution Agency every month which is then distributed amongst your creditors.
Feeling in control of your debt and finances means you are already halfway there. When we don't feel in control, we tend to sit back and let ourselves be crushed by all the expenses flooding our way every month. This drains you and keeps you from taking serious steps to saving your money and paying back your debt.
Too often we find ourselves living from pay check to pay check, hoping that we can service our mortgage, car loans, micro loans and afford our living expenses. When an emergency arises, we are unprepared. The ideal is to have the minimum debt, like your home loan or another low interest loan, and being able to save for emergencies.
When we don't save, we have to turn to borrowing money or using our credit cards for unforeseen expenses. Wouldn't it be great to turn your life around so you don't have to worry about making it through each month?
Being saddled with debt that you cannot handle will keep you from reaching a point of financial freedom. When we worry about debt all the time, we don't plan beyond the debt because it's such a mountain in front of us. It's best to forget about debt to the extent that you so can mobilize yourself to find ways to overcome it and not just manage it.
But what to do? How do you put debt to the back of your mind long enough to work towards your financial freedom?
When you are running around trying to make ends meet and wasting energy on worrying about debt you are wasting time and energy you could have spent focussing on saving and earning more money. It's not just about getting another job, as this post explains. Free up time and energy by finding the best form of debt management for you. This can be in the form of a consolidation loan or debt review, depending on your financial situation.
Debt consolidation frees up time and energy because you consolidate all your smaller loans' repayments into one. You have to apply for a new loan and pay back all your smaller loans. You can save money if you get lower interest rates. This is often the case, because smaller loans tend to have much higher interest rates than the secured loan you want to consolidate with. You can save money further if you cut up your credit and store cards so you're not tempted to get further into debt.
To qualify for a low interest loan big enough to cover your debt you can't be too far in debt to start with, which makes this form of debt management problematic if you're struggling to make ends meet.
If you opt for debt review, you get the help of a debt counsellor. You have to be over indebted to qualify for debt review and it doesn't matter if you're blacklisted, as long as the debt counsellor can prove to your creditors that you cannot afford your repayments. They will then approach your creditors and negotiate a new repayment plan that frees up enough of your salary to cover your living expenses. Like with consolidating your debt, you only pay a single repayment to a Payment Distribution Agency every month which is then distributed amongst your creditors.
Feeling in control of your debt and finances means you are already halfway there. When we don't feel in control, we tend to sit back and let ourselves be crushed by all the expenses flooding our way every month. This drains you and keeps you from taking serious steps to saving your money and paying back your debt.
Source...