What with car payments, mortgages, student loans, and an overabundance of credit cards, virtually everyone has debt. While some debt is certainly manageable on your own, some can be completely overwhelming.
How do you know when you can handle your debts on your own and when should you seek professional help?\
How Do You Feel?
Seeing professional help comes at different times for everyone. There is no hard line, no dollar amount that tips you over the edge. Some people can handle more debt than others without feeling anxious or stressed.
As a general rule, you should consider seeking help when your monthly debt payments exceed 20% of your income (excluding mortgage). However, you don’t have to wait until you reach that “20%” ceiling to seek help.
It doesn’t matter how much debt you’re in—if you’re anxious to get your debt under control (and eventually get rid of it altogether), you are eligible to seek professional help. Financial advisers can help you get rid of any amount of debt, and it’s always best to consult with one before you get in over your head.
What Have You Already Tried?
If you’re not ready to meet with a financial adviser yet, there are plenty of methods you can try on your own first.
- Keep track of all your debts. Write down what you owe, interest rates, and your monthly income. Knowing exactly where you stand financially is the first step.
- Make goals.
- Trade in expensive vehicles or “toys” like snowmobiles, boats, or bikes that you can’t really afford yet.
- Pick up overtime at work, take on a second job, and find other ways to make money on the side that will help you pay off your debts faster.
- Create a budget. Cutting nonessential expenditures and monitoring where your money is going can make all the difference.
What Options Do You Have?
If none of your “self-help” plans are working the way you want them to, it’s time to seek professional help.
This doesn’t mean you have to sit down with an adviser one-on-one and go over your debts, though that’s certainly the most common option. If you’re feeling overwhelmed with debt but aren’t comfortable with a one-on-one session, look at other avenues first.
- Find a financial class offered by a local school or church and attend a few sessions.
- Start your own financial support group and invite guest speakers to come talk to you and your friends and neighbors as a group.
- Read literature or watch seminars from the professionals about how to set up debt plans.
If you have further questions, contact us at McLay – Bankruptcy & Consumer Proposals, and what options are available for you financially. If you’re ready for a one-on-one consultation, we can help you plan your budget and eliminate your debt completely.