Time to put the credit card away (image)
You don’t need us to tell you that debt can be bad for you. It can affect your stress level for a start, especially when you are inundated with demands from your lenders. Debt can mount up too, and it can become difficult to handle if you don’t do something about it quickly. The following are five other reasons why debt is bad for you, and why clearing your debts needs to be your number one priority.
- Debt will affect your future goals
When you’re loaded down with debt, your monthly payments rob you of anything you could be saving for in the future. A vacation with the family, a new car, plans for retirement… you won’t have the means to pay for any of them if you are constantly trying to manage the debts you have accumulated.
- A lot of debt means you will struggle to get a mortgage
Mortgage lenders take your various debts into account when trying to assess your viability for a mortgage. If you’re not earning enough and it’s clear your debts take away a sizeable portion of income, you are likely to get turned down.
- Debt will affect your credit score
A little bit of debt can actually boost your credit score, but only if you pay back the balance each month. This is called ‘building credit.’ However, if you have failed to meet payment deadlines or you are carrying a lot of debt, your credit score will be low. This will negatively affect your life in a number of ways, such as having to pay higher insurance premiums and struggling to buy anything on hire-purchase or through a monthly credit. It is possible to improve your credit score, and this, unsurprisingly, includes reducing your debt.
- Debt can seriously affect your health
Debt causes stress, and this can lead onto other medical problems, such as high blood pressure, migraines, depression, and even heart attacks. As well as finding ways to deal with your debt, you do need to contact your doctor for advice if you have experienced any symptoms related to these health issues.
- Debt can affect your family
Not only will debt affect what you can buy to sustain your family, but it can also cause a breakdown in relationships, especially when it causes arguments between you. Your partner may blame you for the debt that has been accumulated (or vice versa), and your kids may resent the fact they aren’t given the same chances other children have because of your damaged bank balance.
What to do about debt?
So, we have given you five good reasons why getting out of debt needs to be a priority, but how can you do it? A number of options are open to you. For example:
– Stop spending money on anything that isn’t a necessity. It’s time to start budgeting to regain control of your finances.
– Think about consolidating your debts to give you an easier to pay one-off monthly payment each month. Check out Debtconsolidation.co or speak to your local bank for advice.
– Tear up your credit cards so you aren’t tempted to use them.
-Talk to a local debt charity or the Citizens Advice Bureau for further advice in managing your debts.
Feel free to contact us if you have any questions or need an informal chat about any money issues you may be having. Thanks for reading, and take care!