Making healthy and useful financial decisions is a skill that can take time to develop. Don’t be too harsh on yourself if you are still struggling to make sense of your financial situation in your 20s, 30s, and even after! Ultimately, learning to manage finances is a professional skill. For a lot of people, managing money can be tough as most of us grew up without appropriate guidance.
So, if you are in the process of making the most of your finances, managing long-standing debts needs to be part of your strategy. Bear in mind that debt management should only be one of the many decisions you will need to make, and doesn’t exclude building wealth.
So, what is the best approach to put your debts behind you? The truth is that there is more than one way to master debt, and more often than not, you will need to combine strategies.
#1. Sell items you don’t want or use
This is not a novelty. Most people are familiar with selling unwanted clutter on eBay. Essentially, eBay is a wonderful platform for presents you don’t want to keep, clothing items that don’t fit anymore, and old electronics you’ve already replaced. Is there a huge potential to make money? Yes, you can make money by getting rid of stuff you don’t want anymore. Will it be enough to pay off your debts? It is unlikely, unless you have rare memorabilia. Nevertheless, every dollar helps!
Another important thing to remember is your definition of unwanted clutter. Clutter doesn’t have to be inexpensive stuff. For instance, you may have jewelry that was given to you and that you simply don’t wear or like. What is the point of keeping it? You can investigate the value of your unwanted jewelry through professional sources. For instance, rather than googling how much is my Rolex worth to put it on eBay, you could have it evaluated by a watch or juwelier expert for resale to the right market.
#2. Prioritize high interest debts
If you have multiple debts, you want to focus on those with the highest interest rates first. High interest debt, such as credit cards or personal loans, accumulate heightened interest over time. As such, they become more difficult to pay off. So focusing your resources on these first will minimize the repayment amount and make your finances more manageable.
#3. Work with a debt management specialist
Debt management professionals can be your light at the end of the tunnel. Not only can a commercial collection agency understand the complexities of finance management, but they also know more than one trick to get rid of debts.
What can an expert do for you?
Some debt management advisors can help create more financial breathing room by re-evaluating and streamlining your current resources. You might even find that you are able to pay off your debts.
They can also suggest practical strategies to reduce the debt burden. This can involve debt consolidation loans or even debt cancellation in some cases. They can help negotiate strategies with creditors so you can pay off your debts at a lower interest rate or win a settlement for a lesser amount.
The bottom line: taking control of your debts can happen in more than one way. There is no one strategy that works for all. But considering different options and understanding how they can work together can empower you to master debt repayments.