Do you feel like your debt relief strategy is not working? It is true that being stuck in debt can be a very stressful experience. Even if you have been working hard to pay off your debts it seems like you are not making any progress. If this goes on, you might end up feeling frustrated and discouraged. When this happens, you might end up giving up and fail at achieving debt freedom.
If this is what you are feeling, you might have to reevaluate the debt solution you are using. The moment you realize that there is something not right, do not feel discouraged immediately. Be proactive about the situation and act on it immediately. But before you replace it, you should try to identify why your debt relief strategy is not working in the first place.
Possible reasons why your debt relief strategy is failing
There are several reasons why your debt solution is not effective in getting you out of a bad debt situation.
You are not solving the root cause
If you feel like your debt relief strategy is not working, maybe it is because you are not solving the real reason why you are in debt. It is like you are trying to empty a bucket of water without closing the faucet. You need to identify why you have so much debt so you can close it. Was it because you were overspending? Or maybe you just went through a lot of unplanned expenses? According to one survey, the 4 out of 10 of the respondents consider their credit cards are a cushion of emergency situations. While it may give you a sense of security, it will be short-lived once you realize just how much you have to pay off. It is better to lower your expenses and start saving up for a bigger emergency fund.
You did not align it with your budget
Another reason why your debt relief strategy is not working might be caused by your budget plan. There are times when people have solved their root cause of debt – but they failed to update their budget plan to accommodate their debt payments. This might lead you to run out of funds. Or it can lead you to lose money on other priority expenses. Make sure your budget plan is updated and aligned with your debt relief program so it can support each other without making your life feel too restricted.
You are not willing to make sacrifices
Some people may feel like their debt relief strategy is not working because all they can focus on are the sacrifices they need to make. It does not matter if it involves working long hours to earn more or cutting back on some expenses. This setup can make you feel miserable – at least up to a certain level. If you are not willing to do this, you might end up feeling resentment towards the whole debt relief program. It might feel like it is going too slow and taking forever to give you debt freedom. You need to have the right mindset to make your efforts worthwhile.
You can see everyone around you spending
If you are forced to spend a little while everyone around you is spending a lot, that can pose a threat to your debt relief strategy. Reports reveal that 9 out of 10 Millennials tend to compare their own wealth and lifestyle on social media. Even Gen X (71%) and Baby Boomers (54%) go through the same thing. It can be tempting to keep on spending even if you know that you need to conserve your finances to get out of debt. It might prompt you to go on a spending spree – something that you would probably regret later on.
You have a lot of unexpected expenses
Finally, your debt relief strategy may not be working if you still have a lot of unexpected expenses. For instance, if you got your debts because of medical bills and you are still going through treatments and medications, you will probably keep on incurring debts. Instead of exhausting all your efforts to pay off your debts, why not call your creditor and file a financial hardship status? That way, you will be allowed to stop paying for a period of time so you can focus on the important expense you have to fulfill.
How to make your debt relief strategy work
Making your debt relief strategy work is not impossible – but it will be challenging to do it. Here are some tips that you can use to ensure that the debt solution that you will choose will only bring you success.
Check if you are using the right strategy
First of all, you need to ensure that you are using the right debt relief strategy. If not, then it will really fail. While all the debt relief options are effective, there is usually a specific solution that will work best depending on your unique financial situation. So make sure that you take the time to get to know your options. That way, you can make a smart choice in what you will use to achieve debt freedom.
Revise your budget plan
You should also revise your budget plan so it will compliment your debt relief strategy. At the very least, you need to make sure that it will always be funded. Take the time to review your budget so you can check all your monthly expenses. You want to get rid of those that you can live without so you can increase your debt payments. You can choose to downsize your lifestyle to succeed at debt relief. The more you can pay, the faster you can get out of debt.
Establish a support system
Lastly, you can make debt relief possible if you have a support system. That does not mean you should tell everybody that you are having a hard time paying off your debts. But it helps to have one person that you can talk to about it. The stress associated with debt can be overwhelming. Having someone to unload your doubts and insecurities can help you through the difficult task. They can also encourage you as you try to complete all your payments. This support system can be your significant other, a friend, a colleague or even a professional debt expert.