Personal Debt

It’s not easy being in debt. It’s contagious too! Personal debt doesn’t just affect us; it affects our family and friends. It even affects the quality of life we lead. More and more of us are finding it hard to make ends meet at the end of the month. And it’s even harder to know where to turn…

From a personal point of view, it’s easy to think of debt as our fault – and consequently, our sole responsibility. In reality, it’s not like that. Personal debt is a combination of so many factors; ranging from our upbringing through family commitments to social status. In any case, why we’re in debt is not nearly as important as what we’re going to do to get out of debt.

Fortunately we’re collectively getting a little wiser to what we can do to stop the rot; to reverse the debt trend. It can be done. It may take a little time, but it really can be done. In fact, you’re already doing it, just by reading this page.

That’s the beauty of it. You can eliminate debt bit by bit, every single day. Small things can make a big difference. Cutting your spending will help. It won’t be easy, but it’ll help you improve your chances of getting out of debt faster. Easier said than done?

Cut up your credit cards. (Leave yourself one if you have to.) Rely on cash and a debit card instead.

Keep a record of your spending. This will help you identify key areas where you can economize.

Learn how to economize! It isn’t easy – but look for ways to make savings. Consider everything from buying in bulk to celebrating Christmas during the January sales.

Most important of all: be honest with yourself. Deep down, only you will know whether you really need to make a purchase; whether you need to spend the money.

And that’s just for starters. Talk to telephone debt counsellors: it’s a free service; scour the internet: it’s free at your local library; check out the rest of this site: that’s free too. Then work on your long term plan. Where do you want to be in five years time? Ten years time? Think about it, and then act on it. Talk to your debt advisor about where you want to be and they’ll find ways to help you get there.

Of course, it’s important to remember that when we talk about personal debt, we’re lumping an awful lot of things under one umbrella. Personal debt comprises mortgage debt, credit card debt, store card debt; personal loans, rent arrears; all sorts. But for many of us, that’s what our personal debt is: a combination of debts, and a mass of financial responsibility.

If you’re struggling with multiple debts don’t forget you can prioritize your debt repayments. Choose whether you want to pay off the smaller debts first, or concentrate on the higher interest debts. If you decide on the former, you’ll see the results a lot sooner and you’ll enjoy the benefits as your debts decrease to a more manageable number. Devoting your energies to the higher interest debts might seem like harder work, but it’ll be worth it in the long run. By paying off the higher interest charges sooner, you’ll be freeing up more money to devote to the rest of your debts. That’s the debt snowball effect.

Whether it’s a single debt, consolidated debt, or multiple unconsolidated debts, you can take steps to deal with debt. We said that it doesn’t have to be your sole responsibility; and it doesn’t. But it can be in your power to sort it out, once and for all. In fact, you’ve already started...