Merriam-Webster defines debt as something owed: obligation, which is strictly a definition with no emotion to it. However, Merriam-Webster’s other definition of debt is sin, trespass. While debt may have been a sin in Biblical times, most of us don’t think of it that way now. Most of us accept that debt is just a part of our modern world.
The true emotion, perhaps even despair, comes when you don’t know how to manage your debt.
While even young children can answer the question, “What is debt?”, the topic of how to manage it is often one that baffles even adults.
The first step to managing your debt is facing the reality of what you owe. Sit down and write down everything you owe, what the minimum payments are and what the interest rate on each debt is. You should also include when the payment is due.
Resolve to quit taking on new debt. Many people use their credit card when they are short on cash, or if there is no credit left, they use an instant payday loan. While instant payday loans can be life savers in times of a financial emergency such as when you can’t make your house payment or a car payment and you are facing repossession, they shouldn’t be used for every day purchases like groceries. Nor should credit cards.
Make a budget. Determine how much you make per month and how much you spend. Find places where you can cut expenses such as cable television. Can you coupon to save money on groceries and toiletries? Cutting your lifestyle can be a difficult process, but being in debt is no fun either. When you can start paying down your debt, you will begin to feel better.
Seek help if you need it. If you just can’t make your budget work, consider asking a trusted friend for help setting your budget or contacting a debt consolidation agency. You can also teach yourself how to manage your debt by following a course such as Dave Ramsey’s Financial Peace University.
While many Americans have debt, when you get to the point that you feel like you can’t manage it, you should step back and find a way out of the financial hole you are in. While getting out of debt may not be a quick journey, with dedication, in a few years, you can be debt free.