Arizona Tribune - Where to Start if You're Overwhelmed by Debt

Take a deep breath and keep reading for small steps you can consider taking to support yourself during this time.

Take a hard look at your debt

The first step is not to run away from your debt. Facing the facts is hard, but not knowing exactly what you owe is worse. Write down all your debts, including credit cards, loans and any other bills, and then list the following information for each:

• The lender or creditor (who you owe the money to)

• How much money you owe

• How much money you've repaid so far

• Your monthly payment amounts (or the minimum amount due each month)

• The interest rate of each debt

• When your payment is due every month, and if there is a final due date

You may feel a little less overwhelmed once you have all the key information written out. If not, at least you now you can see everything in one place.

If the amount of debt feels too overwhelming, you could try consolidating your debt with a personal loan from a bank, credit union or online lender. It's important to understand the pros and cons of debt consolidation first, however. On the plus side, debt consolidation could help you roll your debts into one streamlined lower monthly payment, often with a lower interest rate. On the other hand, debt consolidation sometimes requires a longer repayment term, which may mean you'll pay more interest over the life of the loan than if you hadn't consolidated at all. For some people, however, the convenience of handling smaller monthly payments is worth it.

Create a budget you'll stick to

Building a detailed budget of all your monthly expenses could help you avoid taking on new debt. Your budget should include all the money you have coming in and going out, even the smallest amounts. Once you have everything written down, here are a few specific actions you could take:

• Cut down on optional costs: Figure out your non-negotiables (mortgage or rent payments, gas and groceries) and areas where you could trim your spending (streaming subscriptions, gym memberships and dining out).

• Commit to a number: Figure out what dollar amount will cover all your costs for a month and stick with it.

• Consider taking on extra work: You could also take on additional work to help pay down your debt. Part-time jobs, like dog walking in your neighborhood or delivering food on the weekends, might be a good place to start.

Find a strategy that works for you

Now that you have a budget, it should be clearer how much money you have to put towards your debt every month. There are several ways to approach paying off your debt, including:

• Debt snowball: Make the minimum monthly payment for all your debts, but focus on paying off your smallest debt first. Use the money you're saving from paying off the first debt to make larger payments on the next-smallest debt, and so forth.

• Debt avalanche: Make the minimum monthly payment for all your debts, but focus on paying off the debt with the highest interest rate first. Use the money you're saving from paying off the first debt to make larger payments on the debt with the second-highest interest rate, and so on.

No matter which strategy you choose, commit to it for at least a few months before you decide whether it's making a difference.

Build a support system

Managing debt can be a lonely experience because there can be shame about it, but there are people you might reach out to for support and advice. Consider the following:

• Friends or family: Even if the people closest to you don't have professional advice to offer, they could be a good sounding board. Sharing your concerns might be a helpful way to think out loud, problem-solve and hold yourself accountable.

• Financial advisor or counselor: A certified financial advisor should be able to help you create a debt repayment plan tailored specifically for you based on your income, debt amount and credit score, among other factors. If you don't have the extra funds to pay for this service, look into nonprofit options, like the National Foundation for Credit Counseling, which often provide free or discounted services.

Take control of your debt

Dealing with debt is difficult, but feeling overwhelmed by it can be even harder. The good news is there are some simple ways to manage and pay off your debt by coming to terms with how much you owe, creating a workable budget, finding a repayment strategy that works for you and building a support system.

You can do this - it may be hard, but you'll be relieved to get on the other side of debt.

Notice: Information provided in this article is for informational purposes only and does not necessarily reflect the views of [publisher] or its employees. Please be sure to consult your financial advisor about your financial circumstances and options. This site may receive compensation from advertisers for links to third-party websites.

CONTACT :

Sonakshi Murze
Manager
[email protected]

SOURCE: OneMain Financial

View the original press release on ACCESS Newswire

M.King--AT