No one likes to admit they are in trouble with money and deep in debt. However, the problem is quite common, and some experts feel it’s a national problem.
Given the fact that debt is practically necessary to get an education for a meaningful career, to buy a home and to have reliable transportation, it’s rare to find anyone who can afford these critical life assets with cash in hand. Just about everyone is carrying some amount of debt, and the condition is so common there’s even good debt versus bad debt.
Options for Managing Debt
Fortunately, there are some practical steps anyone can take to reduce their debt. Here are six no-nonsense strategies for eliminating debt:
- Stop spending more than you’re earning – If a person has a solid, reliable income, there’s a good possibility that personal spending plus debt will exceed that income amount. It can be hard, but belt-tightening and personal frugality are a big first step.
- Focus on the smaller debts first – Debt in total can seem insurmountable, but a good way to overcome such challenges is to break them down to manageable pieces. It’s very likely that a person has multiple debts, some big and some small. Take out the small ones first with extra payments while keeping a minimum payment on the bigger ones.
- Sell stuff you don’t use anymore – Everybody has lots of stuff in their home that has been collected over time and never gets used. And quite a bit of it can be worth money. There are two big ways to realize this value: sell it up front and give it away for a charity tax deduction.
- Earn more money – With the Internet, it’s quite possible to earn extra money in addition to a regular job. By increasing your monthly income, you begin to have funds that can be directed entirely towards debt since you aren’t committed to anything else.
- Reduce your debt interest – Refinancing debt with debt management professionals and companies like Symple Lending can be done by replacing a high interest loan, like that on a credit card, with a lower interest one, like the interest level of a scheduled consumer loan. A number of options exist, from banks to peer-to-peer lending websites.
- Go back to school – If student loans are your problem, and they are overwhelming, go back to school. College classes can be easily taken online and many junior colleges offer waivers for tuition via financial aid. Doing so delays student loans in the meantime.
Nothing Happens Right Away
Reducing personal debt doesn’t happen overnight, but there are some concrete ways to make a difference. Combine them and the effects become significant and noticeable in bringing debt down to a manageable size.