Very few people in today’s world are living debt-free.
What varies is the amount owed; for its a small amount, for others its a
huge figure. So, debt is not a crime, and can be a viable choice to
building a long-term financial wealth. In fact, some people have gained
financial freedom through borrowing, either to finance business or buy
overtime for something in the waiting. Whatever the case may be, debt is
seen as normal and a part of financial programme.
Unfortunately, some people also have gone to the great beyond as a result of debt and the inability to confront it.
In some cases, they worsen their financial state as a
result of involvement in debt. But whatever may be the case, the best
way to get out of debt and remain financially stable is to face it and
resolve it.
Experts preach confrontation of the debt, and like Jim
Collins in one of his books it is described as “Confrontation of brutal
facts.”
What do I mean? Look at the debt by the face and set a plan for repayment.
Set up a monthly repayment plan and ensure you keep to it
despite the pressure to spend on other things. But if its health issue,
tackle it first and see if you close the gap in the months ahead.
Do not allow your debt to steal away your credibility.
Always ensure you keep in touch with you creditor, taking time to
explain to him the efforts you are making to repay back.
Would you for any reason disappoint your debtor on the
date of repayment, do not give him the chance to remind you, walk up to
him or put a call across before the due date to explain why you will be
unable to meet up, and try to give him a new date. But ensure, you must
keep that date as disappointing him the second time would erode your
credibility.
If you are overwhelmed by the debt that you can no longer
meet up, rather than running away, meet your creditor for debt
rescheduling, and by that he will understand you better and also
appreciate your interest to make progress with the repayment.
If it gets to a point where you cannot pay back, rather
than hiding, come out and plead for mercy, as the borrower may vent his
anger catching you afterwards.
For Daniel Pontarelli, building an adult life meant piling
on the debt. Since graduating from college in 2010, the 24-year-old has
taken on a loan for a new car and is helping his wife pay off around
$20,000 in student loans. He took out a $154,000 mortgage to buy a home
and put $4,000 on store credit cards to furnish it.
Though Pontarelli says he has been
careful to get the best interest rates possible, he has had to develop a
system for managing his new debt load. “It took getting organised just
to relieve some of the pressure,” says Pontarelli, who lives in Overland
Park, Kansas, and works at a financial-advisory firm.
Young adults are racking up record amounts of debt.
Students are taking out bigger-than-ever loans to pay for college, and
then freely using credit cards to cover the extras they can’t afford to
buy outright. For many, this leads to a spiral of debt that will follow
them for years. But there are ways to reduce your debt load—and even
catch a break for being a young person.
First, ask yourself if it’s even feasible to pay off your
debt. If your payments are big but manageable with your income and other
expenses, you’ll want to focus on cutting back and consistently paying
down as much as possible.
Pontarelli and his wife tracked their expenses and saw
where they had room to divert money to debt payments. A big culprit was
vacation. They still went away this year, but didn’t splurge on extras.
They enrolled in automatic payments for all of their loans
and credit cards. A number of the lenders who financed his wife’s
college loan gave them a small interest-rate cut for doing so.
No comments:
Post a Comment