There are many articles relating to getting out of debt, and whilst it is understood there is “good debt” and “bad debt” for the majority of everyday people, debt is like a financial disease plaguing their finances.
The challenge with debt is that it’s often a slippery slope, as due to the interest and late fees, once you start missing a few payments your financial position can quickly go downhill. It’s understandable that people in debt can feel so overwhelmed and like things are spinning out of control that they don’t know where to start.
This article, therefore, looks at two fundamental principles in terms of getting out of debt, in an attempt to simplify your thinking, when it comes to this journey.
Consolidate
Whilst some will look to remortgage their property as a way to consolidate their debt and consolidate their existing debt, as an example, to find payday loan debt relief meaning they are now paying just one manageable monthly amount at a relatively low rate of interest when compared to the exorbitant fees short-term borrowing attracts… but there are a number of solutions available. Indeed, sometimes it can work out better to pay off your debt on a 0% credit card and pay this off in the form of a debt consolidation product.
The truth is, being pursued for debt, is an extremely stressful situation, and often people in debt are being pursued by multiple creditors with multiple streams of debt collection activity.
One of the best ways to reduce the stress of this is to consolidate the existing debt, into one lump sum in order to get the plethora of creditors off your back. The two core benefits are that you are now dealing with one creditor rather than several – and rather than having a number of debts with late payments (which can seriously affect your credit score) you now have one debt with manageable monthly payments.
In short, a debt consolidation loan is one of the best ways to get back on track, for as long as you are in the financial position to keep up with the repayments, it can give you some breathing room to get back on your feet.
Increase your income
The second strategy sounds simple enough, but all too often, when we are focused on debt – we stop focusing on creating wealth. If you can start to shift your thinking, in terms of looking at strategies to increase your income rather than getting caught up in the lack mentality that comes with being focused so heavily on debt, you will be in a much better position to get out of debt. There are many ways to make an extra income, from online side-hustles to getting an additional job, or even doing odd-jobs for others such as mowing the lawn or babysitting.
In summary, the most simple way to get out of debt is to consolidate your existing debt in order to get things back on track – and then, increase your income in order to be in a better position to start paying off the debt.
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