Your mail carrier wonders whether you’ve moved away because he can hardly fit another envelope in your overflowing box.
Indeed, you’d like to disappear. Just fly away to some tropical island and never have to face that mounting pile of overdue bills.
Perhaps you got behind after a job loss, a health crisis, or both, and now you’re working again but just barely treading water.
As hopeless as things might seem, take heart. You can get that debt under control.
Here are five steps to getting out of debt, and regaining control of your finances and your life:
- Make a list – When you have many creditors calling you and sending you bills in the mail, it can feel overwhelming trying to determine whom to pay. Make a list of everyone you owe, how much you owe them, the interest rate and the monthly minimum payment. Place the creditors with the highest interest rates at the top of the list, as you’ll want to pay those off first. Those are causing you the most harm.
- Get help – You might be one who considers seeking help as a sign of weakness. Don’t be that person. There’s nothing wrong with turning to someone who has devoted their career to helping people escape bad financial situations. They have experience in helping many people, including those who have been in worse shape than you. Find a company that is reputable, such as one that is in good standing with the Better Business Bureau. Unfortunately, like any industry, there are unscrupulous operators out there who will try to take advantage of consumers.
- Make a plan – Like any other huge obstacle that must be overcome, getting out of debt requires formulating a sound plan. That plan could include enlisting the aid of a debt management firm to negotiate lower interest rates, and therefore smaller monthly payments, with your creditors. If you think your creditors wouldn’t be willing to make such concessions, you’d be surprised. They would much rather receive less money from you than no money at all. They would prefer a consistent monthly payment to erratic, perhaps higher, amounts.
- Execute the plan – Now that you have a roadmap, you should be breathing a little easier, just knowing you’re no longer lost. But you also aren’t yet where you need to be, and you won’t be there until you get into the habit of making your monthly payments on time. You must do this for as long as it takes to pay your debt down to a level that will no longer cause you stress.
- Work ahead – Whenever you come into unexpected or lump sums of cash, pay as much of it as you can toward your debt. This can be your income tax refund, cash gifts on your birthday or holidays, or selling things as such as your car or items you no longer want. This requires incredible will power. It’s very tempting to want to treat yourself to something when you come into some cash. But the faster you pay down your debt, the less money you’ll spend on interest.
Following these five steps to get out of debt won’t always be easy, but if you can do it, you’ll be checking that mailbox daily with no more fear.