Stuck in the Midst of Debt

By Mike

mist of debtDebt is perhaps one of the most pernicious things known to modern mankind. As nobody likes to own someone something (not even a kind remark), we soon become obsessed to pay back our due. Some do it by spending less, cutting back on their lifestyles through frugal habits, others will get a second job or study in the hopes of earning a promotion and generating a bigger income. We all do this because we desire much, hate debt and want to sleep in peace.

Debt is stressful

Often, the most common reason for dispute among couples is money. We challenge our spouse on “unnecessary expenses” and she replies back about the promotion you didn’t get, haunting isn’t it. This is a story we have all heard time and again. When one loses his job and the couple starts to accumulate debt, the note of discord starts to infiltrate the home. Stress increases as are payments accumulate, while interest rates rise due to one or two “forgotten” bills on the kitchen table. The same stress reaches a crescendo when the money is spent (read gone) before it has been deposited into your bank account. You are one step away from payday loans”¦ you are one step away from giving back the keys to your once loved and cherished beautiful home”¦

At this point, you can’t see straight anymore. You don’t sleep well, are less productive at work and constantly run into disputes about money. Debt is literally consuming your entire existence from within. As you can’t walk straight because you are stuck in the fog of debt, saving money becomes an issue. Each time you save a dollar, you think about the 10 dollars of interest you have to pay at the end of the day. Your efforts seems pointless”¦ you are crumbling under the weight of your debt.

There are people to help you see your way through the fog

If you feel as if there is no hope anymore, you are wrong. Debt is like extra pounds, it is quite easy to gain them but much harder to shed! When you are stuck in the midst of your problems, you have difficulty imagining solutions anymore. It is normal, our brain has a tendency to creating a barrier around what we know and rarely accepts an idea from outside of the box. And these walls get thicker as the problem grows.

This is why it is time to reach out for help. The very first step to helping yourself out of debt is to talk about it with other people. I know, money and debt are more taboo than sex these days. But you need to reach out and ask for help. Friends and family can give you tips, point out new solutions because they see the problems from an external, preferably objective, point of view as they are not directly linked to it. Why do you think psychologists are able to help anxious people? Because they see problems from a different angle and help people to see their issues objectively.

If you know a good financial advisor, they would be your best bet to help you get your finances in order. Unfortunately, there are a lot of peddlers in the industry and you are definitely not looking for another salesperson! You need constructive advice regarding your situation.

When you think about debt in a detached manner, you will conclude it is only a math problem. There are 3 variables:

– Your income and possible sources of income

– Your expenses

– The payments attached to the debt built over time

Technically, you need to find the perfect equation:

Your income – Your expenses – Your debt payments = 0 or higher.

You can increase your income in many ways:

– get a second job

– get a promotion

– work more hours

make money online

– sell things (temporary)

– have a sideline according to your skills

You can also reduce your expenses:

– by being frugal

– by sharing expenses, i.e. rent with another person (when possible)

– by looking for deals (read this article about how to cut down your grocery expenses by 20% while being lazy)

And you can improve your debt payments:

– by finding a better rate (zero balance transfer credit card) (temporary)

– by consolidating your debt using a personal loan with a longer amortization (it costs more in interest over the term but frees up some cash flow)

– by including your debt in your mortgage (not really the right timing to do so”¦).

As you can see, there are no magic ways to get out of debt. However, by talking with people around you about your problems, they may help you find alternatives to increase your income, decrease your expenses and improve your debt payments in order to help you sleep better at night.

Once you have a plan, the hard part is yet to come; you must follow it. Many people remortgage their house a few times thinking the property was a cash machine (a sort of ATM). Unfortunately, this only works for so long. Sooner or later, you have to look at your budget and make some changes to get out of debt definitively.

Author: Mike.

Image source: Okinawa Saba

16 Responses (including trackbacks) to “Stuck in the Midst of Debt”

  1. Craig Says:

    Sometimes you can cut debts and cut expenses but you still have more to pay. A lot of times it may be easier or more positive to try to make more money then spending extra time trying to penny pinch. Like you mention, another job can really boost some extra income.

  2. Gina Says:

    Craig makes a good point. Cutting debts & cutting expenses takes time to show positive results in your monthly budget. While trying to make more money could be a faster solution with the same result.

  3. Sam L Says:

    You are right! Debt is very stressful. What makes it worse for americans these days is when you are struggling and you become late on the credit cards, they increase the interest rates/payments. Do not be late….if you need cash get a cash advance at Payday Loan Tree.

  4. Michelle Says:

    Thanks for the post. The first step to getting out of debt that seems totally overwhelming is to sit down, breathe and write out a plan. Writing down goals and tactics can make things seem much clearer.

  5. Stephanie Says:

    I totally agree. I dont fing the planning part hard, i hate the implimenting part…lol

  6. Stephanie Says:

    sorry that word was find, not fing lol

  7. Nicole@Background Check Says:

    It is certainly hard to sleep if you are in bad financial condition. First thing you should do is, analyze what was the root cause of the problem. List down all your debts and make a plan which one must be paid first. Ask your creditors if they can give you the lowest interest rate. From there, analyze your income. Make some sacrifices and cut-down your lifestyle.

  8. FinanciallySmartServices Says:

    Breaking free from debt can seems like a mountainous task but what one need to do is reassess with a clear mind. I agree with you that seeking another form of income is one way forward but what this person need to understand is that this new income is for the debt and not for spending otherwise. Most of the time persons seek another income and up their debts instead of using the money for what it was meant for. Preparing a budget and sticking to it is what would enable one to come out of debt.

  9. Tomas Says:

    Thanks to the author for a good and instructive story. Good information.

  10. Remortgage Deals Says:

    don’t give up and keep posting in all honesty , because it simply well worth to follow it,

  11. DaveS Says:

    I like your section on increasing your income. Working on the side (nights & weekends) as a consultant in the field that you are already an expert in (day job) is a great way to earn extra income.

  12. dsagsa Says: