Does your debt seem as impossible to tackle as a 225 pound running back? As financially taxing as debt can be, it can be as equally overwhelming emotionally and mentally. So, before you let debt convince you the problem is insurmountable, it’s time to regroup, reorganize, and create a plan of action that will get you motivated to make a change.
Overwhelmed with Debt? How to Solve Debt Problems
Here are a few ways to turn that 225 pound running back into a 75 pound kid on a pee-wee team.
Get used to this idea: There is a solution
You might think the size of your debt makes your situation unique, but it doesn’t. There are plenty of people who have faced this problem before you, and there are plenty of people that will face this problem after you. Regardless of the size of the debt, one thing is certain — there is always a solution. The solution might not be void of sacrifice, but with a solid plan and dedication, there is always a way to reach the other side of debt.
Why does this matter?
As of 2016, the average credit card debt load for Americans who carry a balance is $15,799. That statistic alone shows you certainly aren’t alone in your struggle.
Understand the power you have in this situation
You had a hand in creating this situation. Does that statement rile you up? It shouldn’t. In fact, if framed in the right way, it should make you feel a strong sense of control.
The truth is, by recognizing where financial missteps occurred and how you could have prevented them from happening – like sticking to a stricter budget around the holidays or purchasing a car used instead of new – you are allowing yourself to see your own power in shaping your financial present and future. If you believe you had a hand in creating the situation you find yourself in, then you allow yourself to believe you have the power and ability to fix it as well.
Taking responsibility means taking control – and that is a very powerful, invigorating thing.
1) Determine how much you owe.
Determining the exact amount you owe might be incredibly scary, but there’s a good chance the number you’ve created in you mind is likely even more terrifying. There is power in knowing where you stand and using that number to create a plan of attack.
So begin by collecting all of your account information and writing out all of the pertinent information:
- Type of loan
- How much you owe
- Interest rate
- Minimum monthly payment
- Length of the loan (if applicable)
2) Examine your bills.
If you’ve failed to pay your bills on time and you’re paying exorbitant fees as a result, or you’re missing an opportunity to lower your interest rates, that’s all extra money that could be used to pay down your debt. Take a careful look at where the money is going and what could be adjusted. If you aren’t sure what you could change, call your creditor.
Also, take a look at your other reoccurring expenses – utilities, cable, food – and find places to make cuts, regardless of the size. These amounts will help free up some extra cash to throw towards your debt.
3) Create a budget
How much money do you have to put towards your debt each month? Can you go above and beyond the minimum payments? This is where you will really start to make progress.
Create a detailed, line-by-line budget that reflects the cuts you were able to make. Take your list of debts, amounts owed, and minimum required payments and determine how much wiggle room you have.
Seek out qualified help
Sometimes you need a coach to really show you the ropes and create a plan of action that will make a meaningful difference. In the world of debt, a credit counselor can provide that extra guidance and help you create a debt payoff plan that works for your situation and debt load.
If you are motivated and ready to start tackling your debt, DebtWave is ready to guide you on your journey!