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New Year's Resolution: Get Out of Debt Problems

Maya Pillai Aug 21, 2020
Wouldn't you like to be debt free this New Year? Here are a few tips to resolve your debt problems.
A debt-free life is everyone's dream. If you can clear off at least 75% of your debts, then your financial future is in good hands. Once the debts on credit cards and the loans are partially cleared, you would have enough money to save and also invest in your retirement plans. Make getting out of debt problems one of your biggest resolutions this year.

Ways To Resolve Your Debt Problems

This New Year, take steps to improve your financial health. There are a few strategies that you can adopt, to overcome liability. There are many debt management techniques such as debt assistance and debt counseling that you could take advantage of.

Curb Unnecessary Spending

Once you decide to resolve your debts to lead a financially secure life, you will have to curb your urge to spend. Most of us have become accustomed to purchasing goods and services using credit cards. We are conditioned to the formula of "buy now" and "pay later"; this is one of the reasons many of us are in debt.
Cut down on eating outside and spending on unnecessary goods to begin with. You can start by making a monthly budget and making efforts to stick to it. Writing down your daily expense in a diary is also a good option. Review your expenses at the end of the week to understand where you have spent more.

Pay off Outstanding Credit Card Debt

Mounting credit card debt can pose a serious threat to your financial health. If you are planning to improve your financial stability, ensure that you pay off your credit card debts.
Suppose you have multiple cards, use only one card for the time being. Do not close the credit account of other cards because it can affect your credit history. However, you can take measures to clear off the debts on the unused credit cards by paying an extra amount.
Paying just the minimum due amount would be of no help if you are planning to be debt free by the end of the current year. Closing the credit accounts is likely to reduce the length of the credit history. If your credit card debt is very high, then think of credit card debt consolidation.

Use Debit Cards

You should be able to judge the difference between a necessary purchase and an unnecessary one.
Use cash or your debit card to make payments for purchases. This way keep a track of your money and control your urge to spend on unnecessary purchases.

Open a Savings Account

One of the ways to get out of debt-related problems as well as curb your urge to spend is by opening a savings account in a nearby bank.
Ensure that a small amount goes into your savings every month. Apart from that, whenever you have the urge to spend, put down some money into the same account. By doing this, you will be able to save, and later use the saved amount to clear off your debts.
Remember, money that is borrowed using a credit card or through a loan has to be repaid with a whopping interest irrespective of the value of goods/services that are purchased. There are good debts and bad debts. Credit card debt is an example of a bad debt, whereas a student loan, a business loan or a mortgage loan is considered good debt.
However, if you are in debt, never hesitate to go for a debt advice session with a professional. It is never too late to approach a debt counselor who can help you plan your repayment, so that you can work towards a debt-free future.