How do you payoff your debt and stay financially balanced?
Getting into debt is easy and getting out of debt is hard. Life can provide financial challenges and cause us to go into debt but, most debt is self-inflicted. Debt eats away at our finances and keeps us from funding our goals. When we really want to get rid of the debt it may look insurmountable to us. Rest assured you are not the first person to face a debt crisis and you will not be the last. Once you have determined to rid yourself of debt, you have taken the most critical step. Then you will have to decide how to go about paying off your debt. We believe it is wise to continue to cover normal living costs and at least partially fund long-term goals while you pay off your debt.
More than likely you have a few debts that you have accumulated and you may not be able to eliminate all of them quickly. That is not the end of the world either, the real key to being debt free is learning how to live without debt, so going through the pain of paying off the debt ought to convince you not to go back into debt again.
There is only one way to eliminate debt and that is to pay it off. There is, however, a way to reduce the financial pressure of debt without paying it off and that is through debt consolidation. Many people use debt consolidation and because they never go through the pain of paying off debt they end up going deeper into debt. There is however, a place for debt consolidation in dealing with your debt. If you have a good deal of equity in your home you can roll some of your debt into your mortgage when you refinance your home, the effect of this is that it spreads the payment of the debt over the years of the loan and is absorbed into your house payment. This can increase your monthly cash flow and it makes that debt tax-deductible. If you consolidate all of your debt you will have sacrificed little and will likely run up more debt. Learning to payoff debt is an essential experience, we suggest you consolidate only enough debt to give you monthly cash flow to pay down your remaining debts. Learning what debt costs you and gaining the discipline to payoff debt will help you stay out of debt in the future.