Ways To Reduce Financial Stress And Manage Your Debt

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I still remember in my younger years telling my parents I couldn’t wait to get older so I can do things my own way and have a blast every single day since I will have it all.

Honestly, the thoughts have NOT changed but the meaning behind it sure did.

With the presence of COVID-19 pandemic so many plans have been crushed, it has even caused more stress due to the ripple effect it has on the global economy with close to 1 million jobless claims as per The Guardian.

I have not changed my frugal ways but I’ve made small changes on how I used to spend my allowance money because not only we don’t know how long will this pandemic last but mostly for the unforeseen situations due to the pandemic.

Most of us carry some sort of debt such as credit card, student and mortgage loan. With just a little discipline lots can changed and if you are consistent you’ll be debt free in no time

BE TRUE TO YOURSELF

First know how much debt you truly carry. Make a list of the parties you owe that debt to and start creating a game plan by paying all smallest debts first until you reach the last debt.

I’ve used the snowball method. Forget about the highest interest keep paying the minimum monthly and throw all your extra dollar on the smallest debt.

PAY YOUR BILLS ON TIME

Even if you cannot contribute extra on your debt always try to pay at least the minimum on time. You’ll be surprised how these late fees will make it seem not much progress has been done and your credit score taking a leap.

Certain banks will only allow up to three late payments in a row before increasing the interest rate.

I’m a big fan of the auto BillPay function that most banks provide. Beware some will charge a small monthly fee.

With so many online calendars and smartphones apps there’s really no excuses to not find a way to know your due balance in advance.

You really do not want to deal with the credit bureau and these debt collection agencies with their none stop phone calls.

PAY OFF COLLECTIONS

With collection agencies, there’s no fix payment amount that’s required since they are in the business of collection most will work out something with you.

No need to throw extra cash to pay your agreed repayment amount instead throw that money on your past due banking accounts.

CALL YOUR BANK TODAY

“The worst they can say is NO”

Many tend to believe calling the bank when it comes to negotiating is a waste of time and energy. I disagree.

Especially, these days banks are in need of cash most will work with you with one condition I’ve noticed as long it is taken directly from your account every month. Some will forgive one late payment after a certain amount of prompt payments.

DEBT CONSOLIDATION

You can truly take full advantage of it only if your credit score is at a fair to good level otherwise, the loan fees and interest will not make much difference if you had to pay each debt separately.

This is not an option for everyone unfortunately.

Now if you’re in good standing, you can get a loan at a lower interest rate to pay off your debts.

YES, YOU CAN DO IT…

I purposely left out plenty of other options for ways to manage your debt like filing for bankruptcy. This right there should be your ultimate last option.

If there’s a book that made a big impact on what I though was okay actually may be a burden in the long run is “The Power of Habit: Why We Do What We Do in Life and Business”. Change your habits and watch everything else follow.

So many template online on how to Create a budget, I’ll say start from there and stick to it no matter the circumstances.

Live under your means. No one cares if your back-doors window can’t roll down. Also, please stop making excuses to justify why you need to purchase something.

If it doesn’t fall within the budget leave it alone.

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