How Can Debt Affect My Relationships? 

You already know that the cycle of debt can affect your bank account and credit rating, but did you also know that it can cause harm to the relationships with those closest to you? When you’re consumed with financial difficulties, the people around you also feel the heat. 

Video: Eliminate Debt

It’s not hard to notice when debt begins to affect you. You may be dealing with harassing calls and phone calls from creditors, or perhaps you’ve been turned down for credit, a loan, an apartment, or job. If you’re sharing expenses with a spouse or domestic partner, he or she is bound to feel some of the pressure you’re experiencing. You may be planning a vacation, or the purchase of a new car or home, but your debt problems can throw a major monkey wrench in these dreams of the future. 

financial freedom

Children can also suffer as a result of debt. You may not be able to afford extracurricular activities such as sports or memberships in community groups, and there may be fewer presents under the Christmas tree. Even more significantly, children are very aware of tension in the house – and debt creates more than its share of stress. Your friends may pick up on your preoccupation with money, causing concern as well as strife amongst your friendships. 

If you’re experiencing any of these problems, it’s a sign that you need to eliminate debt – not just for your own benefit, but also for the benefit of those who care about you. 

Video: Kiplinger - 5 Ways to Get Out of Debt Faster

Why Should I Eliminate My Debt? 

Getting your financial life under control is vital. Financial security provides a stable base for you as well as your family, and it can help you feel more confident in social situations.  

Debt is a spiral. It begins with an unexpected expense, an emergency, the loss of a job, or spending more money than you have in the bank. Debt can often come as a combination of these factors, or on the heels of borrowing money to cover existing debts.  

managing credit card debt

By the time you realize you’re caught in that cycle, damage has already been done. Your credit history may have been damaged, with your score lower than before. This in turn makes it less likely that you will be approved for credit or a loan, and you may even be turned down for a job if an employer includes financial history in his or her background check.

You also may be paying more in penalties or late fees, and you may find yourself unable to pay credit-card bills, utilities, or even rent. As bills continue to pile up, the cycle grows deeper – unable to pay your debts; you continue to incur more outstanding balances. This places strain on your finances and your household, since others may have to pick up the slack. 

Debt also creates longer-term worries, since a poor credit history can take years of efforts and concentration to improve. This is where the need to eliminate debt now comes into play. 

Video: Debt Management - How to Consolidate Debt

How Can I Start the Process? 

A serious effort to eliminate debt begins with commitment. Not only must you make the decision to pay down your debt for the benefit of yourself and your loved ones, but also you must be willing to follow through on this vow. 

Once you’ve committed to the debt-elimination process, it’s time to decide which method works best for you.  

credit card debt

Many people opt for debt consolidation, which simplifies the repayment process by combining all outstanding accounts into a single loan. This is then repaid through a single monthly payment. Debt consolidation allows many debtors to repay their obligations more quickly, as well as with less expense since consolidation typically results in a lower interest rate.  

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eliminate debtWhen you work with professional debt consolidators, they’ll evaluate your individual financial situation, and then negotiate with your creditors to get you a better interest rate and terms. A professional debt consolidator has the experience to craft a manageable monthly payment plan that not only won’t break the bank, but will allow you to put money away for unexpected expenses. He or she will also help you understand what got you into the cycle of debt in the first place, thereby helping you avoid this type of stress and strain on you and your family in the future. 

Some people choose to eliminate debt through debt settlement, which means negotiating with your creditors to arrive at a lower, lump-sum payment. Some debtors have been able to reduce what they owe by as much as 60 percent – but remember, your creditors must be willing to accept your settlement offer. 

Others choose credit counseling, which is quite similar to debt consolidation since all your accounts are rolled into one monthly payment. With credit counseling, however, the financial-education aspect is far more prevalent. You’ll be expected to learn about the cycle of debt and demonstrate your ability to break it. 

Whatever method you choose, the decision to eliminate debt is a positive one. Make that commitment and follow through on it – for you and for your loved ones.

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