Facing Your Debt Problems
Maxing out that $18,000 limit on your credit card wouldn’t be a worry if Bill Gates. In fact, whether you get $30,000 an hour, but your debt to income ratio is high, you’ll probably still be facing huge debt problems.
Whether debt is small or big, it is a problem. Getting a loan and paying it back on the date agreed can entail serious consequences. This is why it’s better to be wise in spending your money rather than relying on credit or borrowing. For sure, no one wishes to be in debt. The primary reason for getting into debt is overspending. Besides, spending the money that you actually don’t have and you can’t afford can get you into so much trouble. Your problems on debt can equate to stress, despair, and serious depression.
Moreover, debt can cause a totally stressful life, which can lead to tension among the members of the family. It can even get worse when a person ignores his or her obligation and fail to realize the impact of debt problems in the future.
How Much Debt Can You Afford
When you are spending money that is beyond your limit, the tendency to borrow is possible. This is to fill the gap and suffice what was lost. If you do so, most of your salary might just be intended to pay back the money that you owe. Additionally, this becomes a cycle of borrowing money just to sustain your lifestyle. If you don’t learn how to cut back on your expenses, the possibility of stacking your debt is inevitable.
In determining whether debt can become a problem, creditors use a standard formula which is called DTI or debt-to-income ration. Calculating your debt to income ratio will determine if your debt is too much. Besides, several financial professionals state that a 20% higher DTI implies that you are holding too much debt, though others state that 28% is acceptable.
What You Feel When Having Debt Problems
Someone who’s facing loads of debt conveys that he or she has a poor spending habit. It can be difficult to unravel your debt problems to your family and friends. Also, admitting your difficulty in sustaining your usual way of living can be hard. You may be trying to cope up with your payments month after month, making your income insufficient to sustain your other needs.
Furthermore, you fear to face your obligations and think of the possible outcome in the future. It would seem like being deprived of gaining control over your finances which later lead to default. Some may even turn their back and deny the reality of their current financial struggle. For others, who have been compliant with their obligations, it would feel stressful as if they’re carrying the world in their shoulder.
How Can You Eliminate Your Debt Problems
The most feasible way to shun the drastic effect of being in debt is to control your overall finances. You have to gain total consciousness in managing your income and expenses. Also, it is a must that you save for the rainy days. As we all know, money can be easily spent in a second, but compensating it isn’t easy.
If you’re relying on your credit card, you should be mindful not to spend more than what you can afford. It is even better to use it only when really needed. Additionally, there are times when circumstances may arise and you may not have the money to suffice it. This is the reason why building emergency fund and saving for this kind of situation is a MUST.
Money just doesn’t fall from trees, you need to work for it to earn it. So before you spend, make sure to think if you’re using it wisely. Most people fall into the trap of debt due to poor spending disposition. It takes discipline and good management of finances to anticipate the savage outcome if being in debt.
How to Cope-Up With Your Debt Problems
If you are currently facing debt problems, don’t lose hope. If you’re confused about how to deal with your situation, always remember that help is available. GET HELP TODAY and learn how you can manage your situation better.
CONSUMER PROPOSAL EXAMPLE
Example Unsecured Debts
|2||Credit card 1||$6,812|
Your Monthly Repayments Would Be
a Consumer proposal $748
(total contractual repayments)
a Consumer proposal $295
(total contractual repayments)
* Subject to creditor acceptance
* Payment subject to individual circumstances
* Credit rating may be affected
* Fees apply, subject to individual's circumstances.