Approximately three out of five Americans report money being a significant form of stress in their lives. And when you study these individuals, you’ll find that many of them have large amounts of debt just like you. The ones who are able to move past this stress are typically the ones who proactively deal with their debt.
The Stress of Debt
According to Debt.org, American household debt clocks in at more than $14.6 trillion. And while that number is shared across 340 million people, the average American owes $90,460 in debt. However, that number is a bit deceiving, as there are millions of Americans who owe nothing. That means tens of millions of Americans have $100,000 or more in debt. This amount includes debt like mortgages, student loans, credit cards, car loans, and medical bills.
If you find your debt frustrating, you aren’t alone. Recent research suggests that 25 percent of people worry about money “all the time.” Roughly three out of five people say money is a “significant form of stress.”
Debt-related stress puts people at a greater risk for anxiety, depression, high blood pressure, heart disease, diabetes, and obesity. Not only that, but it hurts relationships, tears apart marriages, and causes people to work excessive hours just to stay financially afloat.
Tips for Handling Six-Figure Debt
Having some debt is pretty normal (and not very problematic). But if you have six figures worth of debt, you’re probably feeling more pressure than most people. Here are some tips for proactively addressing your debt.
1. Face the Music
It’s impossible to get out from underneath your suffocating pile of debt if you don’t sit down and take responsibility for where you are. Shifting the blame and pointing the finger isn’t going to get you anywhere fast. It’s time to get organized and start attacking your debt one payment at a time.
Paying off your debt might look like making steady monthly payments. Or, in extreme situations, bankruptcy might be the most practical option. It’s not nearly as embarrassing or financially fatal as most people assume.
“Bankruptcy seems to be this big, bad word for most people,” attorney Rowdy G. Williams observes. “But here’s the thing: Most people who file for a Chapter 7 bankruptcy are actually able to keep most of their assets. It’s really not as costly as some would lead you to believe.”
You may very well be able to pay down your debt without filing for bankruptcy. And if you can do that, there’s no sense in going through the process. But if all hope is lost, a Chapter 7 bankruptcy should definitely be something you consider without hesitation.
2. Consolidate Debt
Debt is overwhelming and frustrating – particularly if you have dozens of different creditors breathing down your neck. Not only is the total amount alarming, but so are the sheer number of accounts you have to keep up with. One way to simplify and save is to consolidate into fewer loans.
There are numerous debt consolidation techniques, but a fixed-rate debt consolidation loan is the most common option. With this method, you basically take out one loan at a fixed monthly rate and use it to pay off all other forms of debt.
3. Reduce Expenses
Are you living a million-dollar lifestyle on a very average income? This could be the bulk of your problem. By reducing expenses to a much more manageable level, you can start making larger payments and get out of debt much quicker. You may even be able to unload some assets you don’t need (like a luxury vehicle or second home).
4. Increase Income Six-Figure Debt
Finally, you might have an income problem. Now’s a great time to go out and look for a job. Whether it’s switching jobs to increase your salary and obtain better benefits, or adding a side hustle to create a little extra breathing room in the budget, there are more flexible options than ever before.
Get Relief From Crippling Debt
You aren’t going to pay off $100,000 or more of debt overnight. It’s going to take months and years of hard work to get it down to a reasonable number. The key is to chip away one payment at a time. And by accelerating your efforts through increased income and strategic reallocation of assets, the timeline will shrink.
Article Submitted By Community Writer
