Better Budgeting: Got the Debt Repayment Blues?

Got the Debt Repayment Blues?

Credit Wise (featured column)
by Jennifer Wallis

When you’re in debt, it is like an invisible ball and chain. Even though others may not know you’re living with debt, it’s something you can’t escape. It can affect every area of your life. You may find yourself afraid to answer the phone because it could be another nasty collector asking for money that you can’t pay. You may not want to open your mail because it’s just another reminder that someone wants money from you. Instead of drifting off to a peaceful sleep after a long, hard day, you may find that you can’t do anything but toss and turn because you’re worrying about what you will do.

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The stress of living with debt can impact your job if you’re getting collection calls at work or unable to focus on your job. It can affect your personal relationships, since finances can be a point of contention between you and your spouse. It can make you snap at your kids as they beg for that new toy in the store. Overall, it can impact your physical and emotional well-being. People experience health problems such as high blood pressure and ulcers because of stress. Sadly, some even take their own lives because they just can't deal with the burden any longer.

When you’re in the midst of all of that stress, it’s usually a huge relief to finally make the choice to get out of debt. Even though you know it will be a long-term commitment, the most important thing is finding a way out. Once you stop charging and develop a repayment plan (either on your own or through a credit counseling agency), you set forth with a new attitude. In short, you’re inspired. You know it will be a lifestyle change to live without credit while you’re on the repayment plan but you’re ready to make that commitment. It sounds a heck of a lot better than the life you’ve been living with debt.

The problem usually sets in about 6-18 months after you begin a repayment plan. Credit cards and loans once allowed you to live above your means and now, you’ve had to stop charging and cut back enough to afford the debt payments, too. It can be a real struggle to learn to live below your means. Even though living on a strict budget sounded like a good trade-off at first, after a few months it can start to feel like you are suffering because you may not be able to buy some of the things you want. It can also be tough to come up with your debt payments each month. Money may be tight. Also, if you are still paying interest on your debt, it can feel like it will never be paid off. Even though you may struggle to make your payments, it can be discouraging to see that your balances aren’t going down as quickly as you’d hoped.

This is the point in debt repayment where the honeymoon is over. You’re past the relieved stage of having a plan and you’re slogging away in the trenches with no end in sight. It can seem that you’ll never reach your goals. You may want to quit. You’ve tried but you’re tired and you just want it to be over.

If you’re feeling this way, it’s important to refocus. While being “debt-free” sounds good, it isn’t a tangible concept. You can’t touch or feel “being debt-free” so it starts to lose its luster. Yes, you still want to be debt free but it is really worth it? The honest answer is YES!

You probably did not get into debt overnight so it’s going to take a little time to get out. Try to find little victories along the journey of your debt repayment plan instead of just focusing on the final concept of being “debt-free.” Focus on the day you pay off your first account and celebrate that as a victory. Once that account is paid off, roll that money to other creditors to increase their payments. This will greatly speed up the repayment process. Every time your balance dips below the next hundred or thousand dollars, rejoice! Your balances are going down, even though it may be a slow process.

As for budgeting, it will probably be something that is adjusted on a regular basis. If it isn’t working for you, make changes. If you need to increase your eating out budget, see if you can decrease your cable bill, for example. Find a trade off that you can live with. Maybe this year for Christmas, you draw names or make some inexpensive gifts. If you still can’t make it work, consider a part-time job. Even $200 per month can make a huge difference. In my life, I have worked two jobs at several points, simply because we needed the extra money. It isn’t my ideal work week to work two jobs but I just reminded myself that it was temporary. Keep in mind that repayment plans last an average of 4 years. It isn’t forever!

Overall, to help you focus, really think about what being debt-free really means. Think back to when you first made the decision to get out of debt. What prompted you to make that decision? What feelings and situation made you want out?

Being debt-free may mean that you can once again sleep at night. Maybe it means you aren’t afraid to answer the phone anymore. Perhaps you’re excited to go to the mailbox again. You may find that you and your spouse don’t fight about money as much as you used to. You won’t have to worry as much about how to pay the bills. You will see that you can buy things you want and you can pay cash for them because you can afford them! Instead of feeling guilty after making a credit purchase, you will feel good when you pay with cash.

Hopefully, along the way you learned to save a little so when something breaks, you can afford to fix it by using your savings account instead of a loan or credit card. After making years of on-time payments, your credit will be in tip top shape. When you do need to finance something, you won’t have to worry about the shame you feel when your application is denied. You’ll be approved! Not only will you be approved but you’ll find that you qualify for great interest rates, too!

When you’re losing sight of your goal and it feels like you’ll never reach it, keep trying. Keep making your payments. Keep cutting back and working that extra job if you must. It won’t last forever. Above all of the great feelings that go along with becoming debt-free is one thing : the satisfaction of knowing that your hard work and sacrifice actually paid off. You’ll get there. Don’t give up!

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Copyright © 2009 by Jennifer Wallis. All rights reserved.

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