Feeling the economic crunchFor anyone who is struggling with increasing personal debt, it may seem like there’s no light at the end of the tunnel. Making ends meet is difficult even in good times, but when there are worldwide economic difficulties as well it can seem almost impossible. It’s important to remember, however, that there are things that can be done, and there are people and organisations that can help, so there’s no need to feel complete despair at the situation.
Perhaps the most important decision you need to take is to talk to someone. Whether it’s a friend or family member, or perhaps a professional debt counselor, sharing the problem is a good way of reducing its impact. Once you have spoken to somebody and got things off your chest, you can then start to give more attention to the avenues that are open to you, and to start the recovery process.
Amid all the trauma and upset caused by mounting debt, it’s easy to forget the most important issue of all: getting column A to be larger than column B. Simply put, the issues are caused by income being a lower figure than expenditure, and until you can reverse that ratio the debt problems are likely to continue. And in order to achieve this, you need to take a long, hard look at your balance sheets.
Gaining strength from adversity
Reducing spending is never an easy option, but in difficult times it can be an empowering and cathartic experience. Not only is it important for the figures on the paper, it can also be somewhat cleansing for the individual. In many cases, it gives people the energy to fight the battle with renewed vigour, so although it may seem an unpleasant prospect, you should be aware of the positive side of it as well.
Your creditors will need to know if you are experiencing hardship, and for many people this is the most difficult aspect of all. Writing letters or making phone calls to explain the situation is seen by some people as an admission of defeat, but this isn’t the case at all. Many people make the contact with a heavy heart only to discover they could be given a little leeway by the creditor, bringing them some much-needed breathing space at a time when they least expected it. It is also far better to appaer to creditors that you are taking proactive steps to seetle your debt situation, rather than letting it spiral out of control.
An unfortunate by-product of debt problems is that the individual may have a poor credit rating, and this can take some time to recover from. All is not lost, however, because a credit card with a low spending limit can be used to improve the situation. There are agencies which offer instant information about credit ratings, so as your financial situation improves you can keep a check on how well you are doing. See here for a guide to poor credit and waht you can do about it . . . there is also a list of resources on the DirectGov site that offer help and advice for paying off debts and tackling credit problems.