Being overburdened with debt is a common problem in modern society. Whether it is a buildup of overspending that occurs over time, a sudden emergency or a period out of work – debt can accumulate and affect your ability to enjoy life. On the other hand, reducing your debt to manageable levels can make life a lot easier and less stressful.

Causes of a debt burden

Individuals get into debt for many different reasons. Sometimes it is unavoidable, with sudden unemployment or a health crisis leading to people accumulating a debt burden as they struggle to pay their bills and afford day-to-day living costs. The high interest rates associated with most forms of borrowing can also lead to a small amount of debt quickly growing into a much larger and more difficult to manage burden, as interest charges eat into your ability to service your usual outgoings.

Not paying attention to your financial affairs is also a common error many people make. With credit easy to obtain, it is very tempting to keep on borrowing more without adequate planning on how the debt is to be repaid.


How to deal with a lot of outstanding debt

The most essential step in dealing with a large amount of debt is to make a start at managing the problem. Debt burdens spin out of control most often because the real underlying financial situation is ignored. Instead, account for what you owe and look at your ability to repay debt. You need to focus on paying back the debt with the highest interest charges, as it is the interest elements of debt that can make matters get out of control.

You may also want to consider consolidating your debts under a new, single loan – a process known as debt consolidation. However, only do this if you are certain you won’t continue to make use of the credit lines you have just freed up. Widely available, debt consolidation for people with bad credit and for those with better credit scores can reduce multiple payments to one, and often carry lower interest rates than the loans you are repaying. This is an ideal solution for many people.

How to stay out of debt

Financial planning is the most important step to take to stay out of debt. Though emergencies and unexpected events cannot be avoided, building up a savings cushion and making very little use of debt when everything is going well will help you stay clear of expensive debt solutions when you do experience financial pressure. Try to spend less than you earn so there is room to cope with changing circumstances.

A debt problem can lead to many difficulties. If you have a poor credit score, you will find it difficult to get loans on the best terms and you may be excluded from borrowing to buy a house. High levels of debt is also very stressful for day-to-day life, as the concerns of making daily payments intrude on your ability to cope with other matters. It also takes a long time to resolve a debt problem, so it is better to avoid accumulating unneeded debts in the first instance.