Financial ups and downs are part and parcel of life, but with the rising cost of living in the country, more people are finding it difficult to make ends meet and manage their savings.
If you are in such a dire situation, you may think of overspending on your credit card or taking a cash advance, but these options can thrust you into a cycle of debt with no clear way out.
To put it in simple terms, a cycle of debt is when you are constantly taking more debt to repay the previous ones. And we know that having a mountain of debt feels like walking around with an ever-increasing load on your shoulders.
The stress of credit card debt and high loan interest rates may just take an irreversible toll on your mental health and well-being. Yet, even in such trying times, finding ways to relieve pressure holds the key.
Pushing your thoughts of debt away and sweeping it under the carpet seems like an instinctive coping mechanism, but it may just prove counterproductive and prolong the strain you’re under. You need to find lasting relief through specific, measurable and sustainable ways to address your debt.
Let’s talk about the 4 ways to address your debt issues in 2024.
1. Consider Taking an Employee Loan
Taking a loan to pay off debt may initially seem counterintuitive, but it can be a fruitful way to tackle your debt woes. By taking into account your short-term outstanding amounts or the minimum amounts to be paid each month, you can ease your debt strain through an employee loan.
Loans for employees are essentially short-term loans from a third-party lender via your employer, where repayments are conveniently collected through salary deductions. Think of it being similar to salary advances from your employer but disbursed through a third party.
It is a preferred path to take when you have the assurance of your employer and the convenience of your monthly salary. This option is best when you’re looking to pay small amounts of your debt periodically.
2. Prioritise and Tackle Your Debts One At A Time
Start accounting for how much you owe no matter how discomforting this task may seem at first. You may arrive at an obscene number, but remember, acknowledging your debt is the first step.
Include every little thing, from outstanding credit card debt after accumulating late fees and penalties to pending loan interest payments. Narrow down your focus on what needs to be paid on priority and what can be paid off immediately like your high-interest debt. Take it one debt at a time and use extra funds if needed and available.
Tackling your debts one at a time makes an overwhelming issue seem more manageable.
3. Supplement Your Income
When riddled with debt, struggling to make ends meet can lead to financial anxiety. A small increase in your income flow can help you improve your cash flow and inch you closer to paying off your debts, thereby regaining a sense of control over your finances.
When looking for ways to bring in extra income, consider several options such as taking up a side hustle, freelancing, working additional hours, or selling your old things online.
Pet sitting, driving for a ridesharing service, and car repair, are various gigs that can help bring in extra money. Try and leverage your hobbies and skills in photography, web designing, copywriting, and digital marketing by taking up freelance work on weekends and in your spare time.
You can also request your employer to allow you to work additional hours or an extra shift for overtime pay. Additionally, list items you no longer use online and sell for that extra cash.
4. Budget Your Spending
‘When you fail to plan, you plan to fail’ goes the famous saying, so when your dipping finances are a constant source of mental and financial stress, take two steps back and assess the situation. Planning may seem stressful when there’s a mountain of debt on your head with no light at the end of the tunnel. However, even when you’re dealing with financial stress and anxiety, it’s still important to craft a detailed budget.
Simply put, a budget is a plan detailing where your hard-earned money goes. Through this financial plan, you’ll be able to see where you’re spending your money (non-negotiables and discretionary), and how much you’ll be left with at the end of the day (savings).
Only a properly detailed budget can give you a clear insight into whether or not you can pay to meet your minimum debt obligations. You can also check if cutting down on any discretionary spending can give you a leg up in saving money and taking back control of your personal finances.
To Sum Up
Remember, debt is not the be-all and end-all of your life. Although not quick to resolve, your debt problem is not unsolvable. Through these four ways, imbibe the mantra for 2024 – the earlier you tackle your debt, the easier they are to deal with.
