How to get out of debt - Bayport Financial Services
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Bayport Blog

Get out of debt: How to improve your financial wellness

Published: April 14, 2020
Categories: Debt Relief, Financial wellness
Tags: Credit Health, Debt Consolidation, Debt Counselling, Debt Management, Debt Relief, Debt stress, Financial education, Financial Health
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Debt affects more than our financial health; having financial issues can affect our physical and emotional wellbeing too, which is why it is so important that we work towards getting out of debt stress mode.

Bad debt and stress are regularly connected at the hip. At the point when we’ve fallen behind on our payments and our creditors start calling, it’s not unexpected to get overpowered with stress as we begin wondering whether we’ll ever recover our finances. It’s important to know how to deal with debt stress before it gets out of control.

In the event that you’ve ended up overwhelmed with debt stress, below are a few strategies you can use to assist you with minimising debt stress and finding debt relief to improve your financial wellness.

5 Steps to improving your financial wellness

Depending on the seriousness of your financial situation, it might take some time to get back on track. But don’t get discouraged, you can improve your situation if you take several small steps.

Step 1: Assess your current financial health

Before you decide on an ultimate objective for your finances, genuinely assess where you are presently. This activity will help you see what, if anything, you have to change and make an arrangement that will push you toward your goal.

  • Record every one of your assets, including bank accounts, however not your home or car unless you plan to sell them.
  • Nest, list your liabilities, including credit card debt or any other short-term or personal loans that you might have.
  • Measure your current financial status by calculating your net worth by subtracting your liabilities from your assets. Hopefully, it’s positive.

If you find that your net worth or financial status is not so healthy, then don’t despair; rather let this information serve as a wake-up call that you need to make lasting changes to turn improve your financial health.

Step 2: Set financial goals

When you have established your current financial situation, the next step is to figure out where you need to be financially.

  • Define a clear goal of precisely what you are working towards to achieve a level of financial wellness that you are happy and comfortable with.
  • Whatever your financial goal, when you have it as a top priority, start working in reverse to discover what you have to change or do so as to arrive at that goal.
  • Set realistic objectives with this clear goal in mind.

When you have a clearly defined goal and realistic and specific objectives that you need to meet in order to reach that state of financial health, put it up on a wall in your office or room or somewhere where you can

Step 3: Manage a personal budget

If you want to try to identify any unhealthy financial patterns, you need to create a personal budget, which is an arrangement for how to manage your cash every month considering both your earning and yourt spending.

  • Start by listing your income and expenses. Take a look at your spending in the course of the most recent couple of months or even around the same time a year ago to get a sign of what you, for the most part, spend in every category.
  • Subtract all of your expenses from your income.
  • If the sum results in a zero or negative outcome, create a plan to start cutting back on expenses, where you might be able to consolidate your debt, and how you might be able to increase your rate of savings. Some common areas where you can spend less are food and entertainment.
  • In the event that the sum is positive, you should still manage your budget to control your spending each month.

In order for the rest of the steps to work, and improve your financial situation, you need to get your budget to work for you and then be committed to sticking to it. It might take a couple of months of tweaking, and self-discipline, however this step is the key to improving your financial wellness and reducing debt stress.

Step 4: Create a long-term financial plan

As you put something aside for expenses in the near future, don’t forget to set some goals to build up a long-term financial plan that will assist you in developing your financial wealth and continue pushing ahead. This includes putting money aside for retirement.

Experts generally recommend paying off credit card debt and other high-interest debt before you start investing. But once you are in a healthier financial situation, you will then be in a better position to start working on a wealth creation plan. It assists to talk to a financial planner about your goals and financial situation and to receive advice about the best strategies to support you in achieving your long-term financial wellness goals.

Step 5: Stay disciplined and motivated

The more troublesome your financial situation is, the more time it might take to turn it around. While this may be disappointing, and you may need to bargain your way of life for a while until you are able to get out of debt and begin moving in the direction of your goals.

The key to being successful is to remain calm, disciplined and motivated throughout the process. Share your goals with friends or family to keep yourself accountable. Separate your objectives into smaller steps, and reward yourself when you hit significant milestones. With persistence and commitment, you can improve your overall financial health and alleviate some stress.

If you are struggling with debt management, contact Bayport Financial Services to discuss the debt consolidation loan options available to you, or visit Bayport if you are ready to apply for a loan now.

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