Money isn’t everything, but it can certainly feel like everything when your finances are in chaos. When you’re struggling to pay off debt or make ends meet, it can color every aspect of your life.
The tips below may be just what you need to take the life-changing step of getting out from under-crushing debt.
Review Your Life Insurance Policy
Many people have life insurance, and in fact, if you’re looking at ways to tighten your budget, it’s one of the things you might be thinking about letting go of. Before you do that, find out whether you have the type of policy that has a cash value. If it does, you may be able to get enough money to solve your immediate financial problem.
You can withdraw the value of your policy and use it to pay off any looming debts or give you the financial cushion you need to make better long-term decisions about your spending. Just be sure that you don’t stop cashing out your life insurance policy. If you’re like most people, you probably need some help with budgeting, so keep reading for more advice.
Borrow For Less Interest
If you don’t have a life insurance policy or another big-ticket item you can sell for cash, don’t despair. You may be able to pay off high-interest loans with lower-interest loans. While this may not make your debt go away, it can save you hundreds or thousands of dollars and help you pay off what you owe years earlier.
There are a few ways you might be able to do this. Some debts can be refinanced at a lower interest rate. Another option might be taking out a personal loan that has a lower interest rate and using that to pay off the high-interest debt.
Finally, if you are struggling to pay off your credit cards, look for balance transfer offers that give you a 0% interest rate for 12 or 18 months. You can roll your high-interest debts onto these and pay them off faster.
Find the Right Approach
Whether or not you’ve been able to do any of the above to get some relief, the bottom line is that over the long run, you have to teach yourself to manage your money better.
This means learning how to budget, manage your spending and save. There are so many articles, books, podcasts and websites on budgeting and personal finance that you’d think this would be easy, you might even start to feel bad that you aren’t more successful at managing your money in the face of all this information.
However, there’s one more element to keep in mind. You have to find the method that works for you. Maybe that’s a tough-love, no-nonsense approach, or maybe your issues with money and spending run deep enough that a counselor could help you resolve them.
Doing everything on an app or using cash for everything might work for you. Automating as much as possible could be the answer. The point is that if one method doesn’t work for you, don’t give up. You’ll find the approach that works for you, and you’ll be able to reap the benefits of smart money management over the long term.
