Debt – The Bane of a Happy Life

Getting into debt is far easier than getting out of it. That’s really overstating the obvious but that’s how people get into financial muddles and messes that can ruin lives leading to depression, disillusionment and even result in loss of life. So, getting into debt is a dangerous situation that otherwise mar a peaceful, happy and carefree life.

Once in a debt situation, it’s never easy to get out of it; the entire process can be a slow and painstaking one going on for several years. But, once the process begins and the commitment has been enforced there is a huge sense of relief although the repayment amount and period can have a deep impact in change of lifestyle altogether. It’s tough going no doubt; however, if the bent of mind and will are strong, it can be achieved.

For many people, the effort it takes to bring on the commitment calls for a great deal of introspection to come up with workable strategies and alternatives to combat the threat; indeed, falling into debt is a threat to one’s peace of mind and hence, the sooner the obstacle is overcome, the better.

Financial advisers have chalked out strategies and aspects that have to be considered before a full-fledged action plan is put in place. As mentioned earlier, a great deal of reflection and introspection is necessary.

• How the situation arose in the first place – dwelling on the past is not good, that’s the advice being doled out but in a debt situation, a lot of this is necessary because only this can help change habits or circumstances that led to the difficult situation. However, this can also help rearrange financial commitments and plan better on savings, if the debt arose on account of repayment towards education or medical or other unavoidable personal commitments.

• Rethink spending habits – spending more than what it is hand or borrowing to spend on luxuries is a dangerous habit. Categorizing expenditure according to priority such as rentals, house expenses, groceries, utility bills, kids’ schooling, gasoline etc. is a good move to understand where expenses can be cut and savings made. The best way to track expenses is to set aside a certain percentage each month and using the balance for expenditure. This way a compulsory savings habit is established.

• Making an account of any debt outstandings – usually credit card payments are the biggest enemy of savings because along with principal repayment huge interests are calculated in the repaying balances. The longer time taken to settle credit card dues, the longer the duration of the debt

• Look for ways to get extra money towards repaying debt – one way is by cutting expenditure and reducing unnecessary overheads; another is to take a part time job some evenings a week or during weekends which can be put aside in the kitty towards repaying debt balances. An interest or passion like baking or cooking can also come in handy in such situations.

• Putting together a plan – it’s wise not to handle such huge financial burdens by oneself; a better move will be to take a close family member into confidence to put together a plan for repayment. Any loan from a friend or family member to make a lumpsum or down payment towards debt will go a long way in reducing the burden. Customizing a ‘debt repayment calculator’ will be helpful.

• Finally, paying off a debt quickly will help get back on the feet faster and bounce back from any setbacks faced. It calls for great determination and a strong frame of mind not to fall into depression but by looking ahead and keeping a positive frame of mind, any obstacle can be overcome.