If you are going through a financial stress or are unable to manage your financial debt, the first steps should be to have a conversation about it. According to financial planners, most people are ashamed to talk about their money mistakes and find it uncomfortable to talk about them.
Here’s what you should do if you are in financial distress:
Talk about your money mistake
If you have not made the right money decisions in your life, remember that you are not alone.
“From businessmen to salaried individuals, you can have financial stress or get into debt. If the breadwinner of the house has taken a loan or have financial issues, they are not usually open to talk about," said Mrin Agarwal, the financial educator and founder of Finsafe India.
“One of the main reasons they don’t want to share information is because they don’t want to let anyone know that they have made a mistake. You need to talk about the mistakes to get the mental stress out," Agarwal added.
Start by paying off your debt
If you have taken too many loans, you do not need to panic. You can begin by writing down the details of all the loans that you have to repay, along with the amount and the interest rate. “If you have taken a lot of debt, first start by repaying the loan with highest interest rate," said Agarwal.
If you do not have enough income flow to repay the loans, either look for ways to increase your income or to sell off your existing assets.
“In one case to pay off the debt, we put any savings possible in liquid funds through systematic investment plan which was redeemed at regular intervals to pay off the debt," said Priya Sunder, the director of Peakalpha Investment Services.
Cut down on your expenses
Another way is to cut down your expenses till you pay off the debt. “You need to keep a check on your expenses till the time you can reduce the debt," said Agarwal.
According to experts, debt compromises your mental peace. “You keep hopping jobs assuming you are not earning enough. However, because you are not able to get mental peace, you are not able to do your job well. It is a cycle to get out. In your 20s to 30s you need to be careful about managing your finances," said Sunder.
You need to save enough so that you can accumulate some money. Once you are out of debt you can go back to your regular lifestyle. However, to reach that stage you will have to sacrifice a bit.
Don’t be afraid to talk about your money mistakes. With some help in money management, you can get out of your financial distress.