Don’t Let Debt Defeat You: Three Ways to Take Control
Photo by cafemama
Poet Ogden Nash once said, “Some debts are fun when you are acquiring them, but none are fun when you set about retiring them.” So true. Getting into debt usually isn’t hard and you probably enjoyed some of the things you do that put you in debt.
Maybe you bought a nice new car you couldn’t really afford, or spent more than you should have on holidays. Whatever it was, it got you into debt and once you’re there, getting out isn’t easy.
As the bills pile up and there is no money to pay them, you may feel so overwhelmed that you are almost paralysed, but no matter how bad it seems, you’ve got to take action if you want to get your finances in order. It won’t be fun, but it has to be done, so here are some things you can do to begin taking control of your debt.
1. First Things First
- When you have a lot of debt, it’s easy to just put all the bills in a pile and just try to forget they exist. Not a good idea. Before you even worry about paying credit card debt, focus on paying for things that provide the basics: shelter, food and clothing.
- Track your expenses and get on a budget. If you’re in debt and want to pay it off, you’re going to have to make some changes. Look at ways you can save on everything from groceries to cell phone bills.
- Look at all your debt and focus on paying off the smallest amount first. For instance, if one credit card owes $3,000, another $1,500 and another $500, begin paying the $500 one first. Try to pay more than the minimum payment and put all your energy into paying that one off. When the first debt is paid, take the money you had been paying on it and add it onto the payment you are making on the next highest bill and so on.
2. Keep Communicating
- When the phone starts ringing and you know the creditors are calling, it’s very tempting to ignore the calls. But really, the best thing to do is talk to your credit card company or lender. First of all, ask for a lower interest rate. If you have high debt and are only paying the minimum payment each month, you could be paying for years and end up paying way more. It’s worth asking for.
- Try to set up a new plan with your creditor. Tell them the situation you are in and be honest as you explain why you are having trouble paying your bills. Maybe you lost your job, or perhaps you had an illness or injury that meant high medical bills. Creditors are often willing to accept lower payments, arrange payment plans and sometimes even forgive some debt, but only if you are talking to them and not avoiding them.
3. Ask For Help
- When you are in debt, you may feel like you don’t have a clue about what you should do. There is help available. Talk to a financial counselor who can help you take control of your situation. To learn more about financial counselling and to find a counselor, have a look at the financial-counselling section on Money Smart.
- If the bills are piling up and you are worried about paying for the basics like utilities and groceries, don’t hesitate to ask for help. The Emergency Relief program is run by the Department of Families, Housing, Community Services and Indigenous Affairs. For your nearest support or referral centre, see the directories on the Salvation Army website or call their national number on 13 72 58, or see the St Vincent de Paul website or call their Canberra office on (02) 6282 2722. For a full list of charities, visit the AustralianCharities website.
Being in debt is no fun and getting out of debt isn’t easy. But the first step to treating the problem is to stop ignoring it and use these methods to take control of your finances once again.
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Category: Debt
