This is a collaborative post by Ellie Jo with tips on getting out of debt.
Many of us plan to relieve ourselves of our debts, but we don’t always have the motivation to clear them quickly.
We might put off debt-relief strategies until a later date, especially if we think our debts are too big to handle right away.
Or we might assume our debts aren’t that big of a problem, so we might lack the urgency to handle them.
However, getting out of debt needs to be a priority, as our lives will suffer if we don’t.
We should consider debt settlement pros and cons, seek help from debt charities, and consider the ins and out of debt discharge programs (there is info in the previous link), as a means of clearing our debts.
When we are proactive, we will make headway with the debts that bind us, so consider the following incentives to clear them now, as you will be glad that you did eventually.
Reasons to Make Getting Out of Debt a Priority
#1: You will have more money for your savings
You will struggle to save money when you’re paying off your debts each month.
You won’t be able to save for a new house, a new car, a family holiday, or anything else that might be on your life bucket list. Instead, you will lose money each month as you pay off your loans, with all of the interest that comes with them, and your life will be limited as a result.
However, when you are free of your debt, you will have more financial freedom to do what you want in life, and you will be happier and more content as a result.
#2: You will get out of the debt trap
If you don’t have any money to put into an emergency fund, you won’t have the finances to rescue you when disaster strikes.
Your car might break down, for example, or there could be an issue with your home. You might then take out another loan to cover the expenses associated with the disaster that has befallen you, and so your debt problem will worsen.
However, if you can clear your debts, you will have more money to put aside, and you won’t have to rely on loans or credit cards to get you out of trouble.
#3: You will increase your credit score
Your credit score is negatively affected when you have too much debt, especially if you have defaulted on any of your payments.
You will then struggle to get credit when you’re looking to buy a car or anything else that might be too expensive for you to buy right away.
You will struggle to get a mortgage too, and you might be subject to a higher interest rate for those purchases that you do qualify for because of the level of default risk.
But once you start paying off your debts, your score will quickly improve, so let that be an incentive for you to start dealing with them.
These are just a few of the reasons why getting out of debt needs to be your priority, so let them act as your incentives. Consider debt consolidation, debt settlements, or debt discharge membership programs, and seek advice if you can’t manage your debt problem alone.
When you’re free of debt, your life will be enriched, and you will be free of the stress and worry that comes with your debt burdens.