It’s always helpful to be honest with yourself. There are few areas in life where this is more prevalent than when it comes to your personal relationship with debt.
There are times when debt can be a marvelous thing. This is often referred to as “good debt.” While that concept might be difficult to comprehend for those who are struggling to pay off credit cards or medical bills, there really are scenarios where debt can be massively beneficial to you financially.
For instance, most people wouldn’t be able to afford a home if they were required to pay in cash. Obtaining a mortgage can allow people to gain equity through their place of residence. But the concept goes even deeper than that. When you can lock in a low interest rate for an essential good like your home, the relative amount you’re paying actually becomes less burdensome over time, as inflation chips away at the value of currencies. In situations like this, utilizing debt (and holding onto it for a long period of time) can actually be massively beneficial to your finances.
But not all forms of debt are so generous to consumers. Credit cards, especially, can be pernicious for those who carry a revolving balance, as high interest rates keep you paying more and more for good and services that likely don’t have the same kind of essential nature or staying power as a house.
For those who are struggling with credit cards, or any form of non-productive debt, finding practical debt solutions can be life-changing.
Finding Practical Debt Solutions
For those who are in debt, but haven’t yet made an effort to achieve financial freedom, have hope. There are things you can do to get your life back on track. Finding practical debt solutions comes in a variety of steps and levels of escalation based on your requirements.
To start, you should see if it’s possible to simply help yourself get out of debt. You can do this with a few basic strategies that work for many people. The most obvious of these is creating a budget. If you’re not currently utilizing a budget, begin today. There are many free services, apps, and instructional videos out there to help you put together your budget.
If budgeting alone isn’t enough, which will be the case for many consumers, you might be able to utilize other strategies, such as credit card balance transfers. While these can work for some individuals, they can also be risky, as you need to make progress on paying down what you owe during the zero-interest grace period.
Many people will find they’re simply unable to effectively get their debt under control on their own. This doesn’t mean, however, that you should wallow and let your life spiral out of control. There are debt solutions for everyone—even those who are seriously in deep debt.
When you work with the right credit counseling or debt relief company, you’ll have experts on your side who can help you create a debt management plan and negotiate with your creditors. It’s critical that you don’t just pick any organization, as there are many groups or individuals who are trying to take advantage of consumers, if not outright scam them.
Bankruptcy is also an option for those who feel they have no other choice but to start with a clean slate. It’s important to note, though, that bankruptcy will stay on your record for years, and will make it difficult to obtain loans and credit. This is because going through bankruptcy is essentially admitting you’re unable to repay what you owe, which is dangerous for lenders who need to ensure they don’t lose money on their loan book.
Getting out of debt can feel like an impossible task. But if you find practical debt solutions, it’s something within anyone’s power.