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5 Important First Steps To Take If Your Debt Feels Too Big To Manage – GOBankingRates

Money / Financial Planning


Money / Financial Planning

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For most people, debt is inevitable. Your mortgage is a debt. Your car loan. Your student loan.

According to credit-reporting bureau Equifax, we can consider those, in most cases, examples of “good debt” because they can help us to grow wealth. Home values will increase, making us money. Student loans pay for our educations, which will lead to better career options and bigger paydays. And that car gets us to school or work.

Then there’s the “bad debt” – credit cards and high-interest loans that you aren’t able to repay. And when the debt grows to way bigger than your paycheck can handle, the debt can seem unmanageable. It’s time to take action.

But where to start? By looking at your debt not as one huge number but as a collection of smaller payments that are achievable to make.

“It is easy to feel overwhelmed when you look at the big picture of things, like how much total debt you owe,” said Jake Hill, the CEO of DebtHammer. “A concept learned while playing sports as a kid was to avoid focusing on how many points you have to make to win, especially if your team is way behind. Instead, focus on the next point at hand, and then the next and so on. This helps prevent you from feeling overwhelmed by focusing on the here and now.”

“I found that this concept applies to tackling debt as well. Instead of stressing over the entire amount that you owe, focus on your next payment, and then the next, and so on. Breaking it down into smaller chunks can make it feel much more manageable.”

But that change of attitude is just the start of dealing with your debt.

Read: 10 Ways To Bounce Back From a Heavy Spending Month on Your Credit Card
See: What Not To Do While Trying To Get Out of Debt

Figure Out Just What You Owe

If you’ve been setting aside those bills, knowing you can’t pay them, it’s time to open the envelopes, gather your statements and review them.

Adem Selita, the CEO and co-founder of The Debt Relief Co., recommends putting everything down on paper or a spreadsheet to see just where you stand.

When your debt gets to the point that you feel like you’re making payments with no insight …….


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