5 Things Not to Do When You Are in Debt
Being in debt is one of the most stressful situations anyone can get into. Sleep can be hard to come by and life can become a bit of a nightmare when you owe more money than you can afford to pay back.
The following are some of the things you need to avoid doing if you find yourself in this position.
Bury Your Head in the Sand
Ignoring a financial problem is one sure fire way of making it worse. In some cases it might be that all it takes is a slight adjustment to your lifestyle in order to get things back on track. For example, it could be that you spend a little more than you earn every single month or that the repayment dates for your loans are at the wrong time of month. No one ever dug themselves out of a debt hole by burying their head in the sand. This is a time when you need to take control of your finances and work out how you are going to turn the situation around. After all, no one else is going to do it for you if you don’t.
Keep Paying the Minimum Amount on Your Credit Card Each Month
If you have credit card debt the simplest idea probably seems to be paying the minimum amount each month. Maybe you think that if you do this the day will eventually come when you can pay off the whole shooting match. The problem is that if you only pay the minimum repayment then all you are doing is paying the interest, so the capital amount only reduces by a minimal amount if at all.
Live Like a Monk for 28 Days of the Year
Ok, so you decide to turn over a new leaf and spend less. This is a great idea but how will you do it? If you plan to live like a monk for 28 days of the month then you probably won’t get great results. This is because by the end of the month you will be fed up and will want to live like a king for the remaining two days. If you need to make changes to your lifestyle then it is best to do this bit by bit and in a controlled way. It is best to spend a little less each month and feel good about it than feel resentful about spending next to nothing. Start with one aspect of your life which needs to be fixed and then you can look at another aspect next month.
Keep Borrowing Off Friends
In cases of emergency it can be reassuring to have friends and family members to borrow from. The problem is that this sort of borrowing isn’t a great idea on an ongoing basis. It can lead to bad feelings in the end and might end up with you losing a good friend because of it. Also, it can be easy to forget about these loans and not realize just how much you owe.
Consolidate without Considering It Fully
Getting a consolidation loan can be a good idea but not all consolidation loans are right for everyone. You might be paying less each month but are you paying more interest or will it take you a lot longer to pay the full amount off? Any solution you come up with or are offered has to meet your long term goals and has to be carefully considered. This means taking the time to consider what is in front of you and how it will affect your finances both now and in the future.
What advice would you give to someone in debt?