Debt is a problem that many people encounter in their lives.
Sometimes it’s good debt, such as taking out a mortgage for a home or a student loan so you can go to university. At other times, it’s bad debt like taking out a loan for a holiday or purchasing something you can’t actually afford. The intuitive and straightforward way to get rid of debt is to simply not get into it in the first place. Sadly, this is easier said than done and you’d be surprised at how many people get into debt despite being financially secure.
Like many things in life, you learn about debt and how to deal with it through experience. Sometimes it takes a harsh life lesson, such as being charged ridiculous interest on a purchase due to your late repayments, until you realise how serious debt is and how easy it is to slip up with your finances. One day you’ll be sitting pretty on a large amount of savings, and the next it could all go to waste because you didn’t budget properly.
To help you deal with debt, we’re going to talk about the most important strategy of all; acceptance.
What does it mean to accept responsibility?
People with poor financial management usually have poor self-control. A lot of the time, they’ll blame their financial situation on someone else or other than themselves. For example, they might blame a partner’s habits for putting them in debt, or they could blame their children for being too needy. These are typical cases and they don’t make much sense at all.
It’s natural to defend yourself when you’re put in a troubling situation. For example, if someone asks you “why are you in debt?” then it’s fairly normal to try and shift the blame away so that it doesn’t make you seem like a bad person. However, there’s a pretty good chance that it was your decision that ultimately caused you to be in debt.
Once you look back and accept the fact that you’re the one that got yourself into debt, you’ll find it much easier to cope with the recovery stage. You’ll blame yourself and you’ll find ways to fix it instead of looking for new arguments to try and shift the blame to others.
Seeking help once you’ve calmed down
Now that you’ve accepted responsibility, you’re easier to approach to speak to about how eliminating debt. There are many ways to eliminating debt, but the one simple fact that you have to cope with is this; you can no longer live your life as you currently do.
Think of it this way, you’re in the negative because you’ve been spending too much money. Most of the time, this is because you’ve been trying to live a life that you just can’t afford. Perhaps you spent a lot of time hanging out with wealthier friends, or perhaps you indulge in hobbies that simply don’t suit your level of income. Whatever the case may be, you’re probably in debt because you’ve spent more money than you make.
If this is the case, then you need to start cutting expenses. Whether it’s buying a jar of instant coffee and drinking that instead of a coffee shop, or walking to work instead of taking public transport, you need to make sustainable changes in order to live a more frugal lifestyle. This is practically the only way that you can deal with your financial situation, and you’ll simply need to cope with it if you want to get yourself out of debt.
Learning from your mistakes and developing better habits
If you’re able to successfully live a more frugal lifestyle after coming to grips with your financial situation, then you may find that you’ll quickly learn from mistakes and develop better spending habits. If we use the above examples, then there are a number of positive outcomes that could happen.
For instance, if your friends valued the money you spend over your presence when you go out together, then perhaps they’re not good friends at all.
On the contrary, maybe you’ll realize that, although your friends are wealthier than you, they don’t care how much you spend on your nights out because they value your company, not your cash.
Similarly, learning frugal habits could help you save money in the future. If you discover that walking to work is doing wonders for your otherwise sedentary lifestyle, then you could continue commuting to work the same way even when you’re able to afford public transport again.
By accepting the responsibilities of the debt that you got yourself in, you’ll learn some fantastic ways to save money and become more financially secure. In short, just think of debt as a hard lesson that needs to be taught first-hand.