Tips to Help You Survive the Stress of Debt
Being in debt can be very stressful and unless you know a few tricks to reduce debt, such as how to consolidate bills, it can severely affect the quality of your life. When dealing with debt related stress, it can be helpful to remind ourselves that "this, too, shall pass" if we take steps to make sure that it does.
Face Facts. All too often, when we are overwhelmed by the enormity of debt and lack of finances, we can procrastinate on taking action. The very things we need to do remain undone. Why? Because depression can hit hard in these circumstances. We can feel like we are drowning in debt related stress and instead of taking action, we are paralyzed. Most of us have known at least one person who hates collecting the mail, fearing more bills or letters of demand. When the mail is brought in, it is often left unopened because they just don’t want to see one more bill. While this is understandable, it is also disastrous. Ignoring the problem only makes it worse and increases the stress.
Decide to Take Action. All change begins with a decision. To climb out of debt and survive the stress that accompanies it, you must decide to take action. Research the options available to you. One major way you can alleviate the stress of debt is to consolidate bills. Look into the various ways you can do this. Seek professional advice.
Take Action. If you need to negotiate with creditors to work out a payment plan, do so. If you need to change suppliers to get a better deal, do that, too. If you are juggling multiple credit card payments and other loans, decide to consolidate bills using the lowest interest, lowest cost loan you can find.
Consolidate Bills. The first, most important action you need to take is to consolidate bills in order to reduce interest costs and increase your monthly cash flow. If you have gone through the process of researching your options, you will know which refinancing option is best for you.
Don’t Waste Your Gains. When you consolidate bills, your monthly disposable income will increase. Don’t waste this extra money. If at all possible, use some of it to pay off the debt as quickly as possible and put some of it in savings so you have something to fall back on and are not tempted to increase debt again.
Live Within a Reasonable Budget. If we live above our means, we will get stressed. It is really unavoidable. So one important way to control financial stress is to keep within a budget. A budget doesn’t have to be draconian, but it does have to balance. You can find good budget guides on the internet and can print out a form that would apply to most people. Initially, it is a good idea to keep track of spending. You might be surprised where your money is going. Where money is concerned, ignorance is not bliss. It’s good old fashioned stress.
Enjoy Your Life. Debt related stress can suck the joy right out of your life. So you have to factor ways of enjoying your life into your plan. Make sure that you budget for some entertainment and that you can buy some special items you enjoy. Unhappiness can create stress, too, so look for ways to be happy and find pleasure in life while on a budget. It can be done. Think about what you love doing. Now think of ways to do these things inexpensively. Be creative. The quality of your life will improve and you will be glad you took the time.
If you consolidate bills and take the other steps mentioned here, you will be well on your way to surviving the stress of debt and gaining a brighter financial future.
How to Consolidate Bills
If you are suddenly hit by unexpected medical expenses, the answer may be to consolidate bills. Many people are paying far too much of their income every month on credit debt. If they consolidate bills, they can either free up some of their income to meet ongoing monthly medical expenses or they can increase their borrowing to cover major hospital and other costs while keeping their repayments the same.
There are a number of ways you can consolidate bills. If you are a homeowner, a home equity loan is probably the least expensive way to reduce your monthly credit payments. However, there is always a risk in tying your home to any debt. If you cannot meet the repayments of the second loan you can lose your home. Chances are, though, that even if the payments decrease or remain the same, you will maintain your current status quo.
However, if the medical expenses are likely to be staggered, a homeowner may well be advised to choose a home equity line of credit to consolidate bills. The advantage of this loan is that the loan isn’t paid out in one payment, whether you need it or not. It is conducted much like a checking account. You only access the account when you need to make a payment. This way, interest is not charged on money that is just sitting in your account. You only begin to pay interest once you withdraw the money.
A personal loan is probably the most common way to consolidate bills. Personal loan interest rates are usually lower than credit card interest rates and so the monthly payments are usually lower. The advantage of using a personal loan to consolidate bills is that there is a definite loan term that means at the end of that term, you will have paid off the original debt. However, they may not be flexible enough to meet your needs in the face of a medical emergency.
An often overlooked strategy debt consolidation is to transfer all balances to a low rate credit card. Generally speaking, people consolidate bills to get out of credit card debt, not replace it. However, low rate credit cards can reduce monthly payments and provide flexibility in terms of credit limit to cover ongoing medical expenses. It is important to read the terms and conditions very carefully when agreeing to a credit card. Be aware of penalties for late payments and possible interest rate increases. The risk of choosing this method to consolidate debt is that you can easily increase your credit card debt, leaving you in a worse situation than before.
So if you are suddenly confronted by unexpected medical bills and are tearing your hair out in worry, take a step back. You may be able to consolidate bills and give yourself much needed breathing space. If you consolidate debt, you will be able to free up income or increase borrowing power to get you through difficult times.