One area of life where you have to strip things back and get to the crux of the matter is debt. For most of us, debt is nebulous; it is many different strings, and we avoid tying weaving those strings into a complete tapestry. We can handle knowing we owe $2,000 on one credit card and $1700 on a loan but add those numbers together into a single figure, and it scares us. As https://www.theatlantic.com/ suggests, most of us don’t know how much we actually owe. Perhaps that’s because we’re simply too afraid to obtain the exact figure.
Nevertheless, you need to know that figure. Here’s why:
- The logistics. You need to know the full figure so you can address it head-on and create a debt management strategy that will work.
- Planning ahead. If you decide to browse https://debtconsolidation.co/ and choose the right company for you, you’re going to need to know the figure you’re consolidating. If you consolidate too little, you could find yourself in need of another loan or debt management plan, so getting the final figure is important.
- A touch of reality. Many of us bury our heads in the sand when it comes to money. If you suspect you have been doing this, then seeing the final figure might be just what you need to finally address the situation head-on.
When you have accepted that you need to know exactly how much you owe, it may be surprising to realize that it’s tougher than you expected to do. Here’s a step-by-step guide that can ensure you find the correct figure:
Step One: Write to your loans company
Information on loans can take the longest, so this should be your first port of call. You want the exact figure you owe right now, not just the amount you initially borrowed. You need to know exactly how interest has affected the overall debt.
Step Two: Add your credit cards together
Next, add together all of your credit card debt. This is one of the easier steps; you should be able to find account information online!
Step Three: Add store cards and hire-purchase
Store cards should be relatively simple, but hire-purchase can be more troublesome. As with loans, you need to know exactly what you owe right now, not just what the value of the initial goods you borrowed for to you was.
Step Four: Add other debts
This step is a necessary addition and one that is often overlooked if people only look at their credit file to learn how much they owe. To get the true figure, you should also be adding:
Debts to friends or family
Amount owing to your utility provider
Rent or mortgage arrears
Step Five: Calculate your final total
When you have gathered all of the above, you will be able to calculate exactly what you owe. With that figure in mind, you can now move on and develop a debt management strategy that really works for you.