Don’t Forget Balance!
If you’re trying to pay off debts – especially large debts – it might start to feel like it’s taking over your life. And while becoming debt free is an important step to take, you still need balance to maintain a healthy life and make sure that things don’t end up getting out of your control.
Most personal finance experts, like Dave Ramsey, recommend being as intense as possible when it comes to paying off debt. But, what if that is not always the best way to go about it?
In general, I agree that while you are in debt, it needs to be your main financial focus. However, here are just a few ways that I think you can maintain balance with other financial goals, even while you are in debt.
Building and Maintaining the Emergency Fund
Even while you are in debt, you need to have at least a mini-emergency fund to see you through.
Personally, I’ve decided to continue building my emergency fund even while I’m in debt by funneling a small, set amount into my emergency fund savings account each month.
If you don’t have an emergency fund while you are trying to pay off debt, chances are you’ll end up putting any emergency that comes your way onto a credit card and you’ll severely de-rail any progress you’ll have made.
Investing in Your Health
Finally, one thing I absolutely wouldn’t skip paying for even if you have debt is your health. Your health is so important and you need to take care of yourself as well as you can for as little as you can while you are in debt.
Keep in mind this does not mean getting your hair highlighted, getting your nails done on a regular basis, or getting a massage every month (unless prescribed by a doctor for real health reasons). These are all things that should be cut from your budget at least temporarily as you work to get out of debt.
Investing in your health while you are in debt includes things like going to the doctor when you are sick, not skipping preventative health screens, and taking medication as prescribed rather than trying to skip doses to make it last longer to save money.
There are lots of ways to save money so you can pay off debt more quickly, but messing around with your health is not one of them.
– via Money Peach
Tips To Take Back Control
While it is true that debt can become dangerous and is a long-term situation, it’s also important to remember that you are not your debt. You can have a full life and still be happy, even when in debt.
When you’re saving for a house you still buy food. When you go on vacation you still expect to buy a car in the next ten years. That’s compartmentalization. We compartmentalize our financial requirements to enable us to have a long-term goal and fulfill short-term needs too. Get a money-allocation system in place that will keep creditors from calling all the time, and then stop thinking about it. Do that system and any money left over put toward your bigger goals.
Make deals and stick to them.
You can negotiate with anyone. Most creditors are used to negotiating payback plans – it’s part of the business of lending money. So propose one you can manage without too much duress. If they say no, then tell them to take you to court. They rarely will. Instead they’ll likely just accept what you’re offering. Even if it’s the IRS, if you show that you are offering what you can pay without ruining your life, they’ll take the offer. Then stick to the agreement. Consider it a tax for living. And then you can go on with your life.
Realize you can take back the debt’s power.
At big milestones like graduation, marriage, kids, we can choose to feel optimistic or we can choose to focus on our fears. When it comes to our outlook, 70% is driven by our genes. But you control the other 30%. Practice being optimistic and happy-go-lucky with your debt. When you practice optimism in one area it ripples into other areas in your life.
Talk to your friends.
Talking about something enables everyone to cope with their problems. It’s true with debt, too. If you find out what other people are doing and how they are feeling you can get better ideas for coping with your debt.
– via blog.penelopetrunk.com
How are you making sure to maintain balance in your life, despite having debt?