If you are in debt, and you are struggling to keep up with your payments, you might be wondering how you got in debt in the first place and how you are going to get out of it.
The good news is that being in debt isn’t always a bad thing; in fact, most of us will be in debt at some point of in our lives. Not all of us can afford to buy a home or a car without some sort of financial assistance. However, when you are in debt to the point where you cannot live on your salary – you might need to rethink your situation and come up with an alternative debt management plan.
If you are in debt up to the point where your monthly salary is not enough and you struggle to pay your bills and live a basic life – you need might need to consider getting help. If you’re not up to date with your payments and you already have a large number of loans or other forms of credit, the chances of you getting another one to pay off all your debt, are slim.
Instead, you can follow these five steps if you are in debt and struggling:
Take stock of all your debt – it’s important to know exactly what you owe and to whom. If you don’t know anymore, then it might be a good idea to run a credit check on yourself – are entitled to one free credit check a year.
See where you can make budget cuts – if you are in debt you need to make some serious lifestyle changes. Check where you can make some cuts to your lifestyle to accommodate your payments.
Set up a budget – work out a budget and calculate exactly where your money is going and what you are spending where. If you are in debt it is important to stick to this budget. If you discover that you are earning less than your expenses, it might be time to consider debt management - or time to speak to your lenders about rearranging a payment solution.