Getting out of debt can be an uphill climb. Often, your income remains the same, or your needs increase. It becomes that much harder to set money aside for debt financing. The difficulty is further escalated in a global crisis like a pandemic. There are fewer jobs and more significant financial burdens.
But then, what if we told you that a pandemic gives you a fantastic opportunity to get out of debt? Here are four reasons why:
1. Many creditors are willing to reconsider your terms.
Lenders and banks are just as afraid of a global pandemic as the average joe. Stock prices fall, prices of food and essential goods skyrocket, and everyone is confused. Because they experience the same situations, many lenders will be open to renegotiating your payment terms.
Additionally, many banks offer relief to their customers, including fee waivers and increases in credit lines. They need the money you owe and are willing to do whatever it takes to get it back. This can be used to your advantage.
2. You can pay more than what's due.
As dull as it can be, staying at home has its perks. For one thing, you won't spend as much on gas, take-outs, and Friday night outings. All that money can be redirected to paying off your debts. Paying more than the minimum required amount will help you pay off your debts much faster.
If you’re able to renegotiate your terms, even better. You can reduce the amounts due each month and pay more than the required amount!
3. Get an extra source of income.
If you're able to work remotely, you may be occupied for most of the day. But then, for many people, the pandemic means they have to put their jobs on hold for a while. You can redirect all that free time toward a side hustle. Since everyone else is stuck at home, there may be online opportunities to make money that people haven't explored.
You can start easily with something like selling your unwanted items on eBay. Or, you can do something bold, like starting a YouTube channel about something you love.You can also market your skills to employers online.
4. Create a budget.
Which of these excuses do you recognize on why you can't create a budget?
- I don't have the time.
- My needs change from month to month.
- I'm barely scraping by.
Amazingly, a pandemic can eliminate most of the excuses we have for not doing essential tasks like budgeting. Since you're stuck at home, you have more than enough time to break down your monthly expenditure and see just where your money goes.
Print out your credit statement for the past couple of months and review your spending habits. From there, differentiate between necessary purchases, impulse decisions, and guilty pleasures. You can then plan for the coming months.
The Bottom Line
Organizations like Jubilee 2000 UK(https://jubilee2000uk.org/iva/a-guide-to-ivas-or-individual-voluntary-arrangements-in-the-uk.html/) provide great options for getting out of debt. The good thing is that being stuck at home can also be an excellent debt management opportunity.You can start by reaching out to your lenders and renegotiating your payment terms