Live Debt Free

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How To Get Out of Debt Depression

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Debt can be a heavy burden; for some, it can cause depression. However, if you are facing a mountain of debt that never seems to get any smaller and feeling overwhelmed to the point of discouragement, there are ways you can get out from under it while also improving your overall mood.

  • Start by listing everyone who expects money from you
  • Create a repayment plan. Even if the amount transferred to each account is small, establishing automatic payments will give you peace of mind. Not having to worry about missing payments will relieve some of the burdens
  • You may also wish to consider government-backed loan consolidation or deferment programs and private debt counseling services
  • Consider using extra money from overtime or side employment to pay down debts faster; seeing regular progress would likely raise one’s emotions by providing them hope for a future beyond debt servitude

There is nothing quite like being in control of one’s finances. Set goals and stay committed; you will reach the other side soon enough. Debt depression does not have to control your life.

Acknowledge That You Are In Debt and That It Is A Problem

Debt can be incredibly stressful, and the best way to start dealing with the strain it can cause is to accept that you are in debt and recognize it as a problem that needs solving.

Refusing to confront your debt issues or sweeping them under the rug will only lead to more stress and anxiety.

The sooner you face reality, the faster you can move forward and take control of your finances. Though it may not always be easy, acknowledging our debt is essential for getting back toward better financial and mental health.

Make a Budget

Making a budget can be overwhelming, but it is necessary to manage debt. It can help you identify which areas of spending need to be adjusted to use your available funds to pay off bills and reduce debt.

It takes work to create an effective budget, but if done correctly, it will provide a plan to follow and the motivation needed to reach your financial goals. If you do a lot of research, plan carefully, and stick to your budget, you will be on your way to becoming financially stable.

Cut Back on Your Spending

When it comes to getting out of debt, cutting back on spending is crucial. It may seem complicated and inconvenient initially, but the long-term rewards for your financial health will be worth it. To make this task manageable, focus on small changes that can significantly impact your life.

Try buying store brands instead of name brands when grocery shopping, ride-sharing, or using public transportation whenever possible, and cut down on eating out or going to the movies with friends. These user-friendly adjustments might not seem like much, but they can save you money in the long run and get you closer to debt-free.

Increase your Income

One of the best ways to get out of debt is to increase your income. While this may sound difficult, you can take a few simple steps to do it successfully.

First, consider getting a better paying job if one aligns with your skills and interests. Doing so will make a considerable dent in your debt and give you the freedom of financial independence. Secondly, consider starting a side hustle.

This could be anything from tutoring others in school subjects to blogging or selling homemade products online. You’ll have fun developing new skills while increasing your income with each task completed. Finally, look for other ways to bring in additional income, such as investing in the stock market or taking advantage of free money offers from credit card companies.

https://www.verywellmind.com/ask-a-therapist-how-do-i-tackle-my-debt-and-my-anxiety-5112715

Make a Plan for Repaying Your Debts

Once you have increased your income, the next step is to make a plan for paying off all of your debts. An intelligent approach is to tackle any debt with high-interest rates first and then gradually decrease the balance on the remaining debts. Alternatively, consider consolidating payments into one monthly payment if you want to simplify the process and reduce financial stress.

This strategy can help keep track of progress more effectively and ensure that each debt is paid off on time.

Before embarking on your repayment strategies, it is essential to research ways to use budgeting and other innovative financial strategies to inform your decisions. Keeping a payment schedule will motivate you, make you responsible, and lead you to a life without debt.

Stay Motivated

To stay motivated throughout the process of paying off your debts, make sure to remember why you are doing this. Keeping the end goal of being debt-free in mind is essential to staying determined to get there.

Celebrate every successful small step along the way, such as paying off a large credit card amount, that gets you closer to achieving financial freedom.

Sometimes, remembering how far you have come can provide enough motivation during those tricky moments when you feel like giving up. Staying focused and motivated on becoming debt-free is possible; just be sure to never lose sight of why it is so important and what it will mean for your long-term financial security.

Seek Professional Help if Necessary

If you feel that you are struggling to take control of your debt situation and put yourself in a better financial position, seeking assistance from a professional can help. A financial advisor or credit counselor can look at your situation and help you figure out what you can do.

They can draft a comprehensive plan to help you reduce debt, build savings, prioritize payments according to interest rates, and protect your credit score. With their expertise and guidance, you can learn about budgeting and money-saving strategies that work for short- and long-term goals.

Having a professional help you through this process can make you feel less stressed and give you more power to make smart financial decisions.

Wrapping Up

Debt depression is genuine, and it can be difficult to break out of its hold. The most important thing is to not just focus on the negative feelings but to start actively working towards a debt-free future. In addition, it can help to prioritize debts, starting with the highest interest rate first and then working down from there.

Creating a budget and tracking spending can help identify necessary changes to eliminate debt. In addition, setting small goals and celebrating even the most minor successes will help maintain motivation to reach larger goals along the way.

Finally, finding support from a friend or family member who is also interested in achieving financial freedom could provide both accountability and an emotional boost when things get rough. With understanding, dedication, and persistence, anyone can break out of debt depression and onto a happier path toward financial freedom.

Image Credit: [Doucefleur]

Developing an Allowance Plan for Kids

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Introducing your children to how money is earned early can set them up with a healthy work ethic that will serve them well later. In addition, they will understand the importance of having to work for the things you want in life. 

Developing an allowance plan for kids can also give them more pride and a sense of accomplishment when using their hard-earned money to purchase something they want. 

Allowance plans can look different for every family based on finances and creativity. If you are not sure where to start, below are some ideas to help you develop an allowance plan for kids, as well as tips for what might not work for your family. 

Keep It Simple with Chores 

Parents will often have their kids help with age-appropriate household duties to earn money. However, there are some great benefits to establishing a plan for your kids to help with chores and earn money. 

For one, it teaches them the structure of doing work for money. It also teaches them how to perform specific household duties that they’ll be able to carry with them for the rest of their lives. Additionally, parents can have help around the home to give the kids an incentive to help out. 

One downside some parents find with implementing an allowance for chores is children who will only help for payment or children who opt-out. However, approaching your kids about why it’s essential to learn how to do chores can circumvent these issues. 

You also want your kids to understand that allowance is just a bonus for doing their chores, and they should not do them halfheartedly to get money. They are part of your family, so they should be willing to help to keep things running smoothly. 

A Flat Allowance with The Option to Earn More

Some kids will earn an allowance from chores, and some parents will give their children an allowance. There is no issue with either of these options, but you can choose to combine them for an exciting allowance plan that helps children learn how to do household chores but doesn’t associate them only with money. 

The way this works is that you can designate a certain amount that your child will get every week, which can be based on your budget. You can also implement certain chores into their everyday routine that have nothing to do with earning money, such as making their bed and putting their laundry in the hamper. 

If they want to earn additional money, you can have certain chores available for them to volunteer for each week. These could include doing the dishes after dinner, vacuuming, cutting the grass, and several other things. 

Give Them “Freelance” Work

You can implement this idea to allow your kids to earn some extra money outside of chores or outside of their designated allowance. They can opt into this freelance work when they hope to earn some extra money. 

These freelance jobs can have a designated amount of money attached to them, and you can also offer advice on how you want the job done. This can also incentivize them to help with more intensive jobs around the home that you may not do every day or every week but still need help with. 

Consider jobs like pulling weeds out of the lawn, washing the windows, or decluttering their room. But, of course, you do not want to give them dangerous jobs when they are young. 

Implement Lessons About Saving

Regardless of how your child earns their allowance, they will know that money must be earned in some regard. However, if you want to implement an extra lesson in your allowance plan, consider teaching them about saving money as well. This could include having a piggy bank or container that they put a certain amount of their allowance in each week to save. 

Allowance: When and How Much?

This could give them a kickstart to having a good amount of savings for when they get older, at which point they can use it as they wish. However, you can give them the option to take out of their savings if they choose to but be sure to teach them about the benefits of saving for more significant purchases or when they get older. 

It can also be a way to teach them that sometimes, it takes time to afford the things we want. They will also learn how avoiding impulse buys you the opportunity to reflect on whether you must have that big-ticket item. 

Teach Your Kids About Money

Letting your kids have some freedom in how they choose to use their allowance is a good idea. This lets them learn to appreciate what they buy and learn the potential consequences of impulse buying or spending money without thinking. 

It would also be beneficial to teach your kids about money early. Teach them how to build a budget, show them how to compare prices at different stores, and show them how good it feels to save up for something they want. Then, you can implement budgets with them when it comes to school shopping or let them have part of the grocery budget to shop for school lunches. 

You can implement innovative financial literacy lessons in many creative ways so that they can understand them for their age, helping to set kids up for a healthy financial future. 

Don’t Overpay Your Kids

Even if you have a lot of wiggle room in your family budget, you do not have to give them a ton of money for their allowance. It is not as crucial for them to have a lot of money. Moreover, it is more critical for them to learn ways to appreciate their money and how to spend and plan purchases wisely. 

  • Even if the parents down the block give their kids $20 a week, it does not mean you have to follow their plan.
  • Instead, agree upon a number that works for your family with your partner or your own, and stay consistent with that amount. 
  • One of the popular methods for determining how much money to allot for kids’ allowances is one dollar per year for their age.
  • For example, if they are five, they will get $5 for the week. How much you give them might also depend on what method you choose to develop your allowance plan around. 

Start Your Allowance Plan Early

The general age at which most parents agree it is safe to start giving allowances is around five years old. This is a good age because your kid is receptive to learning new things, and they are probably already starting to want certain things. 

https://www.today.com/news/set-your-kid-success-allowance-plan-wbna17598609

Having money management be a part of your child’s life early will help them realize how important it is to learn smart money habits. While their whole lives shouldn’t be centered around earning money, knowing how to view money healthily will hopefully deter them from experiencing too much financial stress later in life. 

Don’t Only Let Certain Kids Earn Allowances

This might seem obvious, but if one kid earns an allowance, all of them should. They should also be earning an allowance the same way. You do not want your kids to grow up thinking they are less or more deserving than others. 

If you decide to use the dollar per year allowance plan, be sure you take the time to explain to your kids why the older kids earn a few dollars more. 

Final Thoughts

There is not an allowance plan that will work for every family. You might have to brainstorm some different ideas that you believe your kids will respond to. Have them be part of the process, so they understand that allowance plans are not just about earning money; they are learning skills that will help them in the future. 

They will also feel like their input is valued as part of the family unit, solidifying that vital lesson that contributing to the family with chores and helping around the house is a part of being a family. It is not just an excuse to put them to work. Finally, they will appreciate the sense of accomplishment and the effort you put in to set them up for success in the future.

Photo credit: [kate_sept2004].

Top Ten Online Classes for Financial Literacy

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Personal finance is something most people learn by trial and error. But, if you would rather skip the school of hard knocks, there are plenty of online classes. Financial literacy is all about smart money management and making it work for you.

Whether you need to learn the basics, delve deeper into investing strategies, or learn how to buy a house, there is an online course for you. Here are ten of the best.

1. edX’s Finances for Everyone

edX’s Finances for Everyone is rated as the best overall online personal finance class by Investopedia. It is a free course made for nearly everyone ready to learn how to manage their finances better.

However, you will want to be familiar with basic accounting terms and high-school-level algebra. edX’s course is structured like a typical online undergrad college course, but it is self-paced. In addition, the curriculum provides a solid overview of personal finance topics.

You will start by learning about how the time value of money works and how to use its principles to make financial decisions. Then, you can think of compound interest and the ways it can apply to investing and saving, in addition to borrowing. The course also includes discussion groups and videos. In case you need help making up your mind, here is what people are saying.

2. Udemy’s Personal Finance 101: Everything You Need to Know

This is another free online financial literacy course that starts with the basics. But, you do not need to know accounting terms or understand high-school algebra. Udemy is also rated as one of the top free online learning platforms.

In Personal Finance 101: Everything You Need to Know, you will have access to quizzes and three hours of video content. In addition, you will go through 53 different topics and lectures at your own pace.

This course is specifically aimed at people who are just starting to build their financial chops. So, you will be learning about everything from filing income taxes to choosing the best credit cards. The only thing you need to do is create a Udemy account to get started.

3. Ramsey Solutions’ Ramsey+

Although this online course isn’t free, it is designed by one of the world’s top financial experts, Dave Ramsey. Ramsey is known for his best-selling personal finance books and radio talk shows. The Ramsey+ course will cost you $129 a year, but there’s a 14-day free trial.

You will gain access to Ramsey’s Financial Peace University’s videos and tutorials with the course. You’ll also get the chance to participate in a large online community of others who are currently taking the journey to improved financial literacy.

Follow the link to learn more: https://www.businesswire.com/news/home/20210726005106/en/Test-Scores-Prove-Financial-Literacy-Effectiveness-of-Ramsey-Solutions%E2%80%99-High-School-Curriculum

Besides the online community, Ramsey+ assigns you a personal mentor. This person is with you every step of the way to provide advice, help you overcome learning curves, and use personal finance tools to your advantage.

4. Udemy’s The Complete Personal Finance Course

This is not one of Udemy’s free courses, but it is considered a lower-priced online course that teaches financial literacy. The curriculum is led by an award-winning business teacher and best-selling writer, Chris Haroun.

One hundred ten thousand people have already taken the Complete Personal Finance Course, and 6,200 of them gave it an average rating of 4.6 on a scale of 1 to 5. But, unlike Udemy’s free personal finance course, you will have lifetime access.

Plus, you will go through 122 topics and lectures with over 16 hours of video content. For example, you will learn to save money for retirement goals and emergencies. There is even a lecture on how to budget for your pets.

On top of all these resources, you will get spreadsheets that help you walk through real-life exercises. So, you will not be just listening to someone talk the walk. Instead, you will be trying it out, increasing your absorption of the material.       

5. Coursera’s Financial Planning for Young Adults

Who has graduated from high school or college without an accurate idea of budgeting and managing debt? This is a free course created by the University of Illinois and the CFP Board with young adults in mind.

Some of the topics and lectures include managing financial risk, investing and saving, and budgeting. Responsible borrowing and credit use is another crucial topic. The course lasts four weeks, with each subject including quizzes, real-world case studies and exercises, and videos.

If you are interested in a potential career as a Certified Financial Planner, the last module covers preparation for a finance career. In addition, you will get to see interviews and insights from professionals already working in the industry and as Certified Financial Planners.  

6. Khan Academy’s Saving and Budgeting

This great complementary course zeroes in to create a workable budget and save for the future. There are practical exercises, videos with lectures, and real-world case studies within the course.

Participants in the course will learn a brief introduction to personal money management. Then, you will define what your financial objectives are. Want to save a down payment for a house? Include it! Or, maybe you want to learn how to start your retirement planning before it is too late.

Either way, you will incorporate your personal goals into a budget designed just for your circumstances. You will also learn basic budgeting strategies, such as ideal percentages for various categories.

For example, no more than 30% to 40% of your take-home pay should go to housing. However, this may not be practical for those with lower incomes or individuals who live in more expensive housing markets. Still, you will learn to work around those obstacles and live in your means. If you need more convincing, read more about Khan Academy here.

7. Duke University’s Behavioral Finance Course

Even though this course is designed by a university, it is free to the public. The course teaches how your perceptions and attitudes about money impact your financial decisions. This includes everything from spending and borrowing to whether you save discretionary income.

You will learn how to identify what perceptions and internal biases might be leading to poor decision-making. Then, you will master ways to change those perceptions and make personal finance decisions that help you increase your quality of life.

For instance, a belief that money can only be earned through hard labor might prevent you from earning it through investments. Likewise, seeing your parents stick to conservative investments might have ingrained the idea in your head that high-earning investments are too risky.

Although the behavioral finance course is free, you can earn certification by paying a small fee.

8. National Endowment for Financial Education’s Smart About Money Course

The National Endowment for Financial Education (NEFE) wants to empower the public regarding personal finance. It’s the main reason why the non-profit organization offers its Smart About Money course for free.

A great thing about this course is that you will get access to various tools and instructional materials. There are calculators to work with, worksheets, quizzes, articles, and individual modules.

The articles aren’t just about learning how to budget better or use credit wisely. You can also find information about careers in finance and budgeting for specific life events, such as going back to school or buying a home.  

9. Alison’s Introduction to Managing Your Personal Finance Debts

This is a free and short course, lasting only an hour. But if you want to learn how to handle your debt, Introduction to Managing Your Personal Finance Debts will be up your alley. Even if you do not have a lot of debt, the course can teach you to manage it well.

For instance, you will learn how to track your debt on a spreadsheet and how to pay them off using different methods. You will also learn how to work with creditors and prioritize payoff schedules.

Say you have a $100,000 mortgage balance at 2.5% interest and a credit card with a $10,000 balance at 15% interest. In most cases, you would want to prioritize putting more money toward the credit card and pay it off sooner than your mortgage. The course teaches you strategies like these and becoming as debt-free as possible.

10. Khan Academy’s Housing Course

Khan Academy’s Housing course is not just about buying real estate. It is for anyone who needs to rent or purchase a place to live. So unless you have inherited your dwelling space or live rent-free, this course applies to anyone.

The course contains 19 different lectures, covering the differences between a mortgage and rent payment. For instance, you can deduct a portion of your mortgage payment and initial expenses.     

Image Credit: Steve Stark