People learn a lot in school over the course of their lives. They learn about how their ancestors paved the way to build the world they are now living in, and history books are there to prove it. They also learn how to solve maths equations and memorise the table of elements. They understand a canonical poet’s intention to write a certain piece of literature.
While all those are worthy of being learned to inspire creative thought and critical thinking, they aren’t as helpful when dealing with real-world matters. The things that would actually help people in adulthood — like managing money, land a stable job, or even dealing with debt — are foolishly not part of the curricula.
This leaves adolescents to figure out what they should have learned in school on their own, while some never even have the chance to do so before life gets in their way. They learn how to apply for a credit card to start building their credit, but not about the risks of missing deadlines or slowly drowning in debt.
Lots of adults everywhere are clueless about how they should be dealing with their finances. They know that there are dangers to accumulating debt, but they don’t actually know how to get themselves out of it. So, if you’re having problems with your debt, here are four methods you can do to deal with it:
Consider Refinancing Your Debt
Imagine if you have multiple repayment schemes in motion all at the same time. You could still be repaying your student loans when you entered an auto-finance plan to buy yourself a car. And on top of that, you’re paying monthly mortgages for your current home. There may have been a time when you could handle all these simultaneous payments, but that time has passed.
However, by consolidating your debt across different financial institutions through one management program, you may be able to reduce the interest rates on your bills, ergo, making your monthly dues easier to repay. Refinancing comes in handy when you no longer know how to make ends meet.
One of the most practical approaches to this problem is to apply for a good debt consolidation plan in countries like Singapore. Basically, this is a personal loan that could come with a lower interest rate than your existing debts. You will only need to make repayments once a month through one creditor, which removes the burden of repaying different institutions on various due dates.
Try the Debt Snowball Method
Another way for you to dig yourself out of debt is by trying the snowball method. In essence, this means that you will be repaying all your debts with the minimum amount while putting your remaining budget towards the smallest one. This will allow you to eliminate your debts one by one without having to sacrifice the others.
For example, you have three simultaneous debts that need repaying: 1,000 on your credit card, 2,000 on your mortgage, and 3,000 on your car. Given that you have to repay the smallest amount for your credit card, you can pay that off first to eliminate it from the list while making the minimum on your other debts.
Look into Debt Settlement Services
If you’re struggling to get out of debt by your own means, you must know that you have the option to seek professional help. After all, that’s why debt relief services exist. These companies were created to help people out of debt by paving a path that may allow them to pay less than they owe.
You can look into debt settlement services if you feel overwhelmed by your debts, but be wary about who you trust. That’s because plenty of debt relief companies aim to take advantage of financially vulnerable individuals. If you’re not careful, you might lose more money in the process.
Last Resort: File for Bankruptcy
When you have exhausted all your options and still come up short, the last thing you can do is declare bankruptcy. This option could dramatically affect your credit score and history for a long time, but it can also provide you with debt relief when you have no other choice. So, you have to make sure that it’s the only option you have yet to try.
By filing for bankruptcy, you can keep the unwavering creditors off your back and protect whatever substantial assets you have at the same time. Bankruptcy might be able to reduce or eliminate most of your debts, but as mentioned earlier, it could also dampen your future borrowing eligibility.
Debt is a slippery slope because once you start falling, it’s almost impossible to get back on your feet; emphasis on almost. The path to financial freedom may be long and winding, but if you put in the work to dig yourself out of debt, you may achieve it one day. Plus, it will be easier to cope when you finally get to stop your creditors from breathing down your neck.