Business
What To Do With A Huge Debt?
Are you having sleepless nights thinking what to do with your huge debt? A lot of us in one way or another may have been in this kind of scenario and have probably used some of these helpful tips below in paying off a big debt. Take your time reading them and find out for yourself if they are realizable under these circumstances.
1. Make a detailed budget
Knowing exactly what are your recurring bills or expenses for the coming months will help you budget your earnings. There are fixed expenses that we have to deal with and we should set aside money for these types of expenses like: rent/mortgage, food, transportation or fuel and other utilities (water, electric, heating and phone). For the unexpected expenses that may come along the way like a replacement for your car tire or a wedding party that you have to attend, then, if you have excess money or savings, you need to make the necessary adjustments to make both ends meet and still pay off your current debts. Never put hold paying your debts because this will only lead to additional penalties for delayed payments.
2. Be thrifty
Managing your current expenses properly is the best way to save money and pay your debts. Avoid unnecessary expenses like buying clothes because they are on sale. At the end of the day, you might regret having bought that item and it was just a waste of money, since you still have enough clothes that are still with tags that have not been worn yet. If your work place is just a walking distance, why not break the usual car ride and give yourself a good form of exercise by walking your way to the office. This would benefit your health, since walking is good for the heart.
3. Find another source of income
More and more individuals wanting to earn more juggle two to three jobs whenever their main jobs allow them. Some opt to do extra hours beyond their normal work schedules to earn additional income, while others who cannot manage to do other jobs, involve themselves into small home businesses which could be their hobbies as well like baking goodies that they can sell to their colleagues at work, friends and neighbors. These added resources to your current income will surely help pay your debts in a shorter period of time.
4. Do a garage sale
Unknowingly, over the years we have already piled up things that we haven’t used or taken out from their boxes. This is the perfect time to remove the clutter and get some cash from these things. Hold a garage sale in your area or do what others are doing, selling their stuff online. Again, all the cash generated from the sale should be used to pay your financial obligations to lessen your worries.
5. Assess your debt payments
Make a detailed calculation of all the payments you have made so far from your huge debt. Assess your current balance and see if all these money saving actions have contributed a big difference to the progress of lessening your debts. If you think you have succeeded in your target goal of paying your debts on time, then, continue managing your finances and follow the rest of the money saving tips that has helped you carry on with your motives and that is to become totally debt free in the end.
Debts in general affect our overall outlook and performance in life. They can give us a lot of sleepless nights, stress and unhappy mood feelings. Don’t put yourself to this kind of problem. Debt will never go if you just let it pass by without doing any concrete financial management on your part. Deal it the right way by carefully planning and managing wisely your income. Never declare yourself bankrupt just to become debt free. This action may affect your credit rating score and would be hard for you to file a loan when you really need it most during emergencies. Be a wise spender at all times.
Tagged Debt, Debt consolidation, Expense, Garage sale, Home, Money, Money Management, Personal finance
Cathy DulleaMay 29, 2012 at 1:43 am
Nice article! I think you are correct, making a detailed calculation of your budget and moving accordingly is the most important things to do..!
If one feels that the finances are going haywire, one should immediately stop and start planing.. Otherwise it may get to late ..!
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budgetwaysJuly 4, 2012 at 4:28 am
I like your advice. The most important thing you can do about debt is to do something. Even if it’s not drastic, taking small steps to deal with the debt will help you cope and, over time will hopefully make a difference.
Of course, as a blogger about budgeting, I am prejudice to that course of action.
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akanbiJuly 6, 2012 at 1:54 pm
This article is extremely helpful! I think it’s also good to establish multiple streams of income both on and offline. Its not easy but it can definitely be done, then tackle your small bills first right on up to your largest bills. Just a thought
psmith140July 8, 2012 at 2:57 am
Thanks for the article. Whilst I think a garage sale may be helpful, I think it is wise not to get in debt in the first place. Only ever spend money that you have, and if you are going to borrow, make sure you have a plan to pay it back – all things considered. It’s like the rule gamblers have “even if I lose it all, I still have the house and my job” ie. gamble what you can afford
LinxJuly 9, 2012 at 11:05 pm
Excellent article. Thank you. Also, makes a lot of sense. In fact, I have just climbed out of a deep hole of debt…and I actively did a lot of what you said here.
Sitting down and breaking down the one big amount into a smaller and achievable amounts made it less overwhelming for me…and empowered me to take constructive action.
I also paid off the larger interest loan first, and worked my way down. Getting credit cards while at school is a big no-no, I had no idea how to use it back then.
theaaaJuly 12, 2012 at 8:44 am
Great advice, thank you so much.
I was wondering if you had any recommendations for online jobs or other money making ideas? I can’t really do a garage sale because I have nothing to sell, so, I think I might need another source of income…
streakanimeJuly 12, 2012 at 4:04 pm
I agree with some of the other posters. I would be very curious to see what advice you give on online sources of income. You always have the best resources and tips. I can only imagine that an article about making money online from you would be spectacular.
ashmonnJuly 26, 2012 at 6:09 am
This was very informative. For me the best way for me to tackle my debt was for me to find another source of income along with contacting my creditors and letting them know my situation.
This allowed me to negotiate a reasonable payback system with them as well as generate more cash flow to cover my monthly living expenses. The internet is a great place to start looking for extra income.
Joe WellsAugust 22, 2012 at 3:54 am
I think you are right when you say you need to deal with the debt right away. Pretending it is not there will just compound the issue… it won’t go away on its on. Being thrifty and possibly finding additional work are also great ideas. Using coupons when shopping, not buying things you don’t need, all fall under being thrifty. Finding another job is a good idea as long as it doesn’t contribute to your stress..Over working yourself can happen before you know it.
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toughtrasherAugust 23, 2012 at 11:31 pm
Interesting read here. I’ve had to deal with some debts a few times over my life and I did follow some of these steps, particularly finding a new income.
I got a new job that comes almost directly after my first one, so I was working two shifts a day. It was very tiring and I just want to recommend that people in large debts should only involve themselves in another job if their body can handle it. If not, you’re just waiting for a large hospital bill that’ll come for you if you’re not taking for yourself.
PaladinOctober 4, 2012 at 11:49 am
Thanks for the article. Whilst I think a garage sale may be helpful, I think it is wise not to get in debt in the first place. Only ever spend money that you have, and if you are going to borrow, make sure you have a plan to pay it back – all things considered. It’s like the rule gamblers have “even if I lose it all, I still have the house and my job” ie. gamble what you can afford.
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