There are many different ways to get into debt and many factors cause debt to accumulate. Perhaps you find it all too easy to use your debit or credit card to make purchases with money that you have yet to earn. Funding your education is a common source of student debt and payday loans are another example. Debt can also be the result of being coerced into accessing it like in the case of sex trafficking or using your good credit to cosign or guarantee for a loan. You can also acquire debt through no fault of your own such as becoming a victim of fraud, losing your job, getting sick, or going through a divorce.
Today, I share strategies to get out of debt, no matter what got you into it. I discuss how to begin by creating a debt list and a budget to assess the funds you have available each month to repay your debt. I describe three debt repayment strategies that take different approaches, giving you a choice that aligns with your mindset and goals. I highlight when to seek professional help and the types of professionals that you can turn to. I also share why you should not be too hard on yourself and should expect a few ups and downs along your debt repayment journey.
“Be kind to yourself throughout the debt repayment process. You will have ups and downs, and that is perfectly natural.” – Tracey Bissett
This Week on Young Money:
- Making a list of debts to assess the situation
- Reducing anxiety by confiding in someone you trust
- Creating a budget to determine what is available for debt repayment
- Three strategies to pay down your debt
- When to seek professional help from a credit counsellor or licensed insolvency trustee
- Being comfortable with the natural ups and downs of debt repayment
The four steps to get you out of debt:
- Assess the complete situation
- Talk to someone you trust
- Make a plan, including a budget and debt repayment strategy
- Be kind to yourself
- EP005 Biggest mistakes made when educating young adults about student debt
- EP023 How to Protect Yourself from Fraud
- EP037 Cohabitate in a Financially Fit Way
- EP044 Dangers of Payday Loans
- EP049 5 Questions to Answer Before Getting a Credit Card
- EP057 Bankruptcy and Consumer Proposals what does it mean with Doug Hoyes
- EP127 Sex & Money: Shining a Light on Human Trafficking
- Hoyes Michalos Bankruptcy Study
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