It’s never easy coping with debt, especially when your income is not sufficient for timely repayments unless you compromise on some expenses, turning the entire thing into a vicious cycle. It takes some determination to keep from getting side-tracked into over expenditure and focusing on resolving your debt issues.
Some debts take a month or two to settle, while some may go on for months or even years before you can get rid of them. Whether you have short term or long term debts, and no matter how big they are, you have to understand that repayment is an on-going process. You should neither panic, nor ignore the debt and carry on with your life as usual. What you need is a strong will and a solid repayment plan.
Getting past a huge debt is an accomplishment. Learn to reward yourself when you repay the debt, or when you reach major repayment milestones if it’s a large debt. For instance, if you settle on your education loan or when you have repaid 50% on your mortgage, that calls for a small celebration. Get your whole family involved in planning the event or purchase something that everyone can enjoy. This will ensure that your kids and spouse are aware of the benefits that come with a little perseverance.
Set up a reward fund
If you have a plan for a holiday trip or a purchase, it may be a little hard on your carefully budgeted finances to take out a lot of money in one go. Instead, you should try saving a small portion of your paycheck balance towards a small ‘reward fund’, which you can use for these occasions.
Don’t go overboard
Let’ say you’ve worked hard to rid yourself of a $7,000 car loan. It’s an achievement worthy of some reward. However, going on a $2,000 vacation does not qualify as a reasonable reward. This way you are just doing away with one debt only to usher in another. Since you are aware of how hard it is to deal with an existing debt, don’t add to it.
Once you have rewarded yourself, continue with renewed effort to ease your debt load. Now that you know how satisfying it can be to be partially debt-free, work towards complete freedom from financial obligations. Keep placing rewards for yourself at every significant milestone to ensure that you stay committed to your task.
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