Are You in Debt Crisis?

debt-1376061_1280There are no debt problems that cannot be resolved! We may not be able to come up with quick solutions or immediate fix, but there should always be a way to solve it. And the earlier you deal with it, better debt management.

Debt is not just a monetary issue, it involves the wholeness of your life. So, solutions are wide and varied – from cutting on spending, finding lower interest rates, budgeting, or simply getting out of your debt with a help solution from experts.




There are ways to deal with debt problems. Which one is right for you will depend on whether you’re in a technically defined debt, or if you are just worrying or due to huge debt.

There’s a strong indication if you answer yes to either of these:

Are you having difficulty paying all your basic outgoings: mortgage, rent, energy bills or credit     card minimums?


Are your debts (excluding your mortgage) bigger than a year’s after-tax income?

Before you start tackling your financial problems, the basic and most important thing to do is get a disciplined handle on your spending. Stop borrowing and maximize repayments. Focus on cutting the cost of debts, rather than looking at the bigger picture of all spending.

Refrain from borrowing more. Traditional debt help say: Never borrow your way out of a debt problem.

If it’s possible to borrow more cheaply elsewhere to replace existing borrowing, this can provide a huge boost as lower interest rates mean more of your cash goes towards paying the actual debt rather than just covering the interest.

If you can’t cut cost on debt, or if after doing that you’re still struggling, then consider some severe measures.

  • Talk to your lender, let them know if you are unable to pay; it’s always better to talk to them.


  • Get help from the government – There are few ways which may be able to provide you with interest-free borrowing than getting into commercial loan. You could get as much as $1000 lent, and repayments are dependent on what you can afford to pay.


  • Free Debt Counseling – If all options are exhausted, it is worth talking to the right people to counsel you, the non-profit debt counselling help. Be careful not to confuse this with ‘free help’: many commercial companies say they’re free as you’re not charged directly, but you’ll still pay somehow.

These non-profit agencies are also the ideal people to go to if you’re being harassed and bullied for payments by debt collection agencies. The debt counselling service will inform collectors, which will then give you a month’s breathing space to get yourself on a better footing. And take care of your debt at a manageable pace.

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Becoming Debt–free For Next Year

You may have suffered from being debt-ridden for the current year, but it is not too bad to start the incoming year on a new leaf /clean slate when it comes to your finances.


When it comes to your finances, this is the best time to reflect on how you did with your spending and taking care of your debts; and plan for next year. You would also want to consider or think that you will finally taste debt freedom.

If you are carrying anything around the average credit card debt of $16,000 you likely feel the same way. Take heart, it can be done. You can kill your debt next year, or make significant strides towards it in a few simple ways.

Work on a Plan – if you want to “kill” your debt next year, there should be a plan. It is a simple process – just like planning ahead your next vacation for next summer. The basic key is to personalize it. You can use the debt snowball or debt avalanche method. You can start on a budget or you can just simply track your expenses.

Make More Money! – At times, we focus on cutting costs when we’re paying off debt. It perfectly makes sense as we need to find ways to free up some funds to pay off debts. However, this should not be focused solely on this. You may also want to find ways to earn extra money.

You don’t have to take on extra job to earn. Other ways to increase your finances can be:

  1. Ask for a salary increase.
  2. Start a side hustle.
  3. Pick up extra hours from work.

***Plus other great ways to earn extra money.


Make Friends – It is one of the most overlooked ways to pay off debt. Paying off what you owe can be very isolating at times. You might feel shame and disappointment or lack of courage to focus on your financial problem. Counteracting with friends will give you that sense of “company” to get over your financial trouble. These friends are meant to not only hold you accountable to kill the debt but also to motivate you. Trust me, both are needed to be successful.


Adjust your Attitude – Staying out of debt is a matter of adjusting our attitude. You don’t want to pay it off only to return to it in the future. Break the cycle of debt to look different for everyone. This means getting rid of the “I deserve it” attitude. Be self-aware to know what that attitude is and get rid of it. It will be difficult to do at first, but take one day at a time and over time you’ll see a changed attitude.

Bottom line is, commit to killing your debt now and you will be well on the road to tasting debt freedom next year.

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Effective Ways to Get Rid of Debts Once and For All

Some of us, can fare very well with debts, paying above the minimum on every account/debt, and aware of what to spend. For others, somehow, debt is a “curse” that has them followed by creditors. If you are overwhelmed by debt, quick and drastic moves are needed to breathe the hope of getting out of it. Check these friendly tips:

> Stop bleeding yourself to death – It is the first-aid tip when there’s a life-threatening injury. Same rule      holds true when your financial survival is on the line. When there’s a lot of cash involved to settle debts, you basic needs can be compromised and might lead you into bankruptcy. Stop adding on your debts.

> Picture a debt-free life – Try a little visualization therapy to motivate yourself. How would you feel if you are debt-free? How would you live? What are you long term goals and accomplishments? Feeling good about these “pictures” of yourself will do you good in deciding to steer clear from debt.

> Work on a full budget check-up – Take a thorough review of your budget. Keep track of every penny coming in and out to have a hands on of how much you can pay against your debt.

> Steer away from climbing the debt ladder – Once you’ve trimmed down your budget to pay significantly more than the monthly minimum on your bills, you can either apply the extra payments evenly on all your accounts or choose a payback strategy that focuses on paying off one or two accounts first before moving on to the others. While you’re ramping up payments, you make minimum payments on the others. When your highest-interest balance is gone, you move down a rung of the ladder and apply all your extra payments to the account with the next highest rate. You repeat the process until all your debt is eliminated.

> Create a repayment snowball – One of the common strategies in paying off debt is called snowball. Instead of using interest rates to determine which account to pay-off first, focus on the size of balances. Start by putting extra money on the account that has the lowest balance and, once paid off, shift funds to the next one up.

> Ask you creditors for assistance – Yes, you read it right! What we don’t realize is that, creditors are very much willing to work with debts concerns. Explain your circumstance if unemployed, earning low and can’t cope with payments, or a medical emergency. They may be able to waive your interest charges temporarily.

> Seek for credit counseling – If you can’t seem to figure out on how to come up with a debt-elimination plan, your next best option is to seek professional help from Credit or Financial Advisers. A professional credit counselor can help you review your debt situation and identify repayment options and money management techniques that you may not have thought of on your own.

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Live Debt Free

Michael Welter




Mike Welter


michael welter wsm



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Michael Welter WSM Group


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Out from Your Personal Debt

If you are considering to borrow money and pay it back on a monthly basis, personal loan would be the best option. But before dipping into it, here are few things that you need to know before you go further.

Personal Loans – being catered by banks or other lender are loans that are not assured by any asset such as your property/possessions. It is also known as unsecured loans.


Advantages of Personal Loans:

> You can borrow more than with a credit card.

> You have the option on how long you would like to repay the loan. But bear in mind that the length of a loan will affect the amount you are charged in interest.

> Interest rate you pay is usually fixed (but not always).

> You can pay your loan on a fixed amount each payment. This means your repayment amount is going to be the same each month and easier on budget.

> You can consolidate few debts into your personal loan, this means reducing your monthly repayment costs. But this may mean extending the length of loan and so paying more.

***You can make over-payments or pay off a personal loan in full before the end of your agreement without penalty.

Disadvantages of Personal Loans:

> Personal loans have higher interest rates compared to other forms of borrowing.

> Because the interest rate may reduce the more you borrow, you may be tempted to take out a bigger loan than you need. This might become a debt pit.

> Older loans normally have an early repayment charge if you want to pay off your loan early or overpay.

Personal loans have variable interest rates, it can go up or down. If you can only make the initial repayments, you should shy away from this type of loan.

Think carefully before accepting any payment protection insurance (PPI) the lender tries to sell you. This insurance will cover your repayments in case of accident, illness or you lost your job. The idea is good, however, it’s been widely mis-sold and many of the policies on offer weren’t adequate or didn’t pay out at all. Much as you want to avoid this cover, you will almost certainly get a much better deal by checking prices with several different providers.

Getting the best personal loan deal can be a bit tricky. Scout for the best offer, consider the interest rate, and compare the rates online. Consider peer-to-peer loans especially if you have a good credit standing. Some loans may offer lower interest rates and are available for smaller amounts.

***SECURED LOANS – If you have a property, you may consider availing of a secured loan. But, you will be exposed to bigger risk, because your property is secured against your loan. If you can’t repay your loan, the lender could force you to sell your home to pay off what you owe.

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Few Hacks to Get Out of Debt

Stuck in debt is really stressful! You cannot think straight on which to pay first, and kinda lost somewhere.

Here are few life hacks to get out of the situation:

> STOP BORROWING MONEY – This should mean stop buying items using credit cards or loans. This will help you focus solely on the debt that you currently have so that you can develop a game plan to pay it off quickly.

> WORK ON YOUR EMERGENCY FUND – You might be asking yourself why have an emergency fund? This emergency fund can become your source for emergencies while paying off current debts. This serves as a buffer between you and debt.

> CREATE AN ATTAINABLE BUDGET AND WORK ON IT - Developing a budget that tracks your income and your expenses is crucial to getting out of debt in a short period of time. It will help you gauge where you are with your finances so that you can move forward toward your goal. It will expose whether you have money left over, which is called a surplus, or if you are in the negative, which is called a deficit. The goal is to increase your extra fund and use that money to pay down your debt. There are two ways that you can do this. First, you need to earn some extra cash, this may mean that you need to work extra hours or look for additional part time job. Second, is to cut down on your expenses. Review all your expenses and assess which of your expense you can reduce or cut-down. You may need to get used to letting go of few luxuries you are used to.

> SET UP YOUR BUDGET – This is predominant in determining a plan to pay off your debt. There are two ways that are worth considering. First is where you list your debts smallest to largest regardless of the interest rate. Second is called “laddering”. This is where you list your debts, starting with the highest interest rate card first and end with the debt with the lowest interest rate. This method makes the most mathematical sense, because you will save the most money in interest over time.  Regardless of which process you choose, the key is to stick with it.

> PITCH ANY EXCESS MONEY AT YOUR DEBT – If we are getting out of debt, we have some extra funds thrown into our laps that we may not considered into our debt elimination in the first place. We may decide to take this funds out and pay off debt. Such examples are tax refund, inheritance, sold items/car/house, etc.

Being caught in debt should not be an agony for the rest of your life. It is just a matter of developing your financial skills to start your life being debt-free.

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