How to Carefully Clear Your Personal Debt
At some point in our lives we are all likely to encounter debt in some form. There is really no shame in that at all, and how we determine the process of dealing with that debt will go a long way to deciding how we manage our finances on the whole, and how our lives are shaped. If you are in a tight financial spot you might need to look for help, from friends and family, your employer, via a credit card, or through your bank or payday loan lender. If you have learned how to live your life carefully through clearing your personal debt, it will stand you in good stead should you face this type of situation in the future.
Managing your finances should certainly be taught in schools. None of us ever know enough when we first become adults, and it can be extremely difficult to learn how to budget effectively. It is no wonder that so many people enter personal debt, ranging from monthly payments on a mobile phone, to larger debts such as a monthly mortgage payment or something a little bit more serious such as a personal debt from a loan, credit card or store card. If you are not prepared to live your life in a way that allows you to manage your debt, it can be difficult to remove that debt in the future.
One of the great myths of our time is that we should all look to purchase our own property at some point in the future. You may think that this is a good idea, to give some balance to life, to own a physical asset, and to stop throwing away money as rent. This might be true, but for some people the flexibility of renting is a big plus, as is the fact you are not tied down to a huge debt that will take decades to pay off. This is down to personal choice of course, but for some people owning a home is not conducive to living a debt free lifestyle.
We are also told that you should cut out the credit cards and the store cards. If you are compulsively purchasing items via credit this could become a long-term problem, but if you can manage these types of cards, pay off monthly statements and keep it under control, it can actually be a good thing for your credit score. If in the future you do decide you want to apply for a mortgage, or car finance, it will look good on your credit file and make you a more attractive proposition to lenders.
Clearing your debt in the meantime is achievable with clear thought and dedication. Make a thorough list of your existing debt and from there choose whether to consolidate it into one manageable debt that you can pay down monthly. Or whether to tackle it head on with monthly payments that get you into the habit of paying off your debt, either the smaller debt first or the larger ones, depending on your preference of approach.