If you aren’t able to stay on top of your money, then it’s easy to fall into habits and spending patterns that, over time, erode your financial security, and undermine your plans for the future.
But exactly what can be done about this? Let’s consider a few worthwhile steps toward financial security and freedom.
Assessing Your Current Financial Situation
To begin with, you’ll want to take stock of the current state of your money. This means writing down all of your existing debts, and working out how much you’ll be paying – not only from month to month, but over the long term, too.
Your review should account for the total amount of debt, as well as the rate of interest and the terms of repayment. Once you have an idea of what you’re going to be paying, you can start to make plans for how you’ll pay it.
Exploring Debt Consolidation Loans
Debt consolidation loans are a hugely effective means of managing multiple debts. They not only vastly reduce your stress levels; they often also drive the cumulative rate of interest down, and ultimately result in you paying less. You’ll take out a single large loan, with which you’ll pay all of your existing creditors. From that point onward, you’ll make a single monthly payment to a single lender.
When determining whether this step is worthwhile, of course, you’ll need to factor in any additional fees that might be incurred by ending an existing loan prematurely, and the differences in interest rates involved. In most cases, however, the difference is more than worthwhile.
Considering Alternative Solutions
Debt consolidation isn’t the only step available to you. You might also think about remortgaging your property, or transferring the balance on a high-interest credit card to a lower one. The latter option only applies if your debts are on a credit card, while the former one is only available to homeowners. There’s also the possibility of negotiating new terms with your creditors. After all, it’s in their interest to help you pay back what’s owed.
These measures aren’t as all-encompassing as a debt consolidation loan, and rarely will they completely transform your financial life. That said, they can often make a significant difference.
Implementing a Sustainable Budgeting Plan
It’s worth devising an entirely new budget that will keep your debt repayments on track, while still allowing you to cover your daily expenses. Do this with the help of your favourite spreadsheet application. Make sure that you’re periodically reviewing your progress, and adjusting your spending so that, in the long term, your financial goals are supported.
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