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Dealing with Debt

May 17, 2013

Dealing with DebtDebt can strain or even destroy a family.  For example researcher Jeffrey Dew found that couples in debt spend less time together, have more fights, and are less happy.  Compared with other topics, arguments about debt and finances last longer, generate more yelling and hitting, and are more likely to carry over into other issues.  It is no surprise, then, that the leading cause of divorce in the United States are disagreements about money.

Excessive debt also brings health risks, such as insomnia, headaches, stomach aches, heart attacks and depression.  Many spouses feel very depressed about their debt load and sleep most of the day.  They are overcome by feelings of helplessness.  For some the stress becomes unbearable.  For example, BBC News reported that a wife in south eastern India committed suicide after falling behind on payments for loans totalling the equivalent of $840.00 U.S.. She had borrowed money to pay for her children’s medical treatment.

What are some of the common challenges that couples face with debt?

1)       Blaming each other – a key to success is to fight the debt not each other.  View debt as the mutual enemy.  Your children can also join in the effort.  For example receiving a used bicycle can be just as enjoyable to ride as a brand new one.  By children being satisfied and content – not always looking for new and more they can help take some pressure off of their parents.   Couples can arrange a time to talk openly and calmly about their debt.  They can acknowledge any mistakes that they may have made but rather than dwelling on the past they can try to agree on principles that will guide future financial decisions.

2)      Getting out of debt seems impossible – a key to success is to take control of your finances.  This can be done by determining a current budget.  Keep a record of all money moving in or out of your household for 2 weeks or a month if that works better.  Add to this, record expenses such as taxes, insurance or clothing which may occur less frequently and use monthly averages for them.  Increase your income.  Can you take on extra shifts at your current job, perform seasonal work, tutor a student or make your hobby into a home business.  Reduce your expenses.  Buy an item only if you need it, not because it is on sale. Waiting to buy is also a good idea since it helps you decide if you really need the item or if you just want it.

Other strategies include reducing your housing costs, conserving electricity and other utilities, pack a lunch and eat out less, sell non-essential vehicles and use public transportation when you can.   Analyze your debt and act.  Perhaps you can pay off smaller balances first to boost your morale or get a new loan at a lower interest rate to pay off existing ones.  You may choose to pay off the debt with the highest interest first which is another strategy.

If debt consumes your thinking try to keep money in its proper place.  List things that are truly valuable to you that money cannot buy.  Then determine how you can increase the time and energy you devote to each item on your list. Debt problems do create stress and dealing with them calls for sacrifices but the results are worth the effort.

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