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Do It Yourself Debt Relief Help

Do It Yourself Debt Relief Help

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Mark Cappel
UpdatedJun 19, 2024
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    4 min read

True Debt Relief Help Comes from Inside You

Have you ever wished you could win the lottery so you could wipe out your debts? The sad fact is that many lottery winners find themselves back in debt within five years. The average person who consolidates debts also winds up in debt again. The only way to get out of debt forever is to change the way you view money.

Determine How You Got Into Debt

Debt happens to everyone at some point, and it is not necessarily bad. A mortgage or student loan is generally considered good debt because it is a real asset or an investment in your future.

Bad debts from credit cards, medical bills, and personal loans are the kinds you should worry about. The four main causes of bad debt are:

  • Family death or major medical emergency/illness
  • Divorce
  • Job loss
  • Overspending

If you had no debt prior to a major financial downturn, then you can get debt relief help through debt consolidation, debt settlement, credit counseling, or bankruptcy.

If your debt is a result of overspending, you will need to make changes to your spending habits.

Find Your Spending Triggers

Asking yourself why you spend more than you make is the first step to debt relief. Do you buy necessities like food, shelter, and reasonable transportation, or do you buy things you want at the moment like a new CD or an expensive dinner?

If you make enough to live on, but overspend on things you want, you can only find permanent debt relief by uncovering your spending triggers. Common reasons for overspending are:

  • Maintaining an image or lifestyle
  • Instant gratification
  • Feeling of power or self-worth
  • Avoiding feeling poor or deprived
  • Stress relief (Retail Therapy)
  • Credit doesn't feel like cash

To pinpoint your spending triggers, keep a spending journal for one month. Record everything you spend, what you bought, how you felt at the time, and why you wanted it. At the end of the month, review your list. You will be able to see your triggers in the list.

For example: "$1.00, lottery ticket, felt excited and hopeful, winning would change my life." The trigger is spending to improve self-worth or to avoid feeling poor.

"$43.54, new red heels, felt like my boss is pushing too hard, wanted to treat myself." The trigger is stress relief or wanting to feel powerful.

Change Your Money Views

Changing your money views is the third debt relief step. Money itself is neither good nor bad. The trouble comes from how you feel about money. Spending makes you feel good about yourself, satisfies a desire, or relieves your stress at the moment, but then you feel worse when the bill comes or you can't pay your other bills.

Emotional Spending

If you're an emotional over-spender or spend because you have the money or it's coming soon, it's time to cut yourself off. Spend as little money as possible for one month. Don't shop, go out to dinner, or go places where you can spend money. Bring your lunch to work with you to save money.

When you must spend money for things like groceries or gas, take only the amount of cash you'll need. The rest of the time, carry only $20 in case of a true emergency.

At the end of the month, look at how much more money you have than you usually would. How good does that feel? If you saved enough to pay down some debt, how much better does that make you feel?

Credit Spending

If you overspend because credit does not feel like cash, spend only cash for one month. Remove the checks and credit cards from your wallet. Once you see how much money you're actually handing over, you'll spend less.

Make the Change Permanent

Permanent change is the final debt relief step. At the end of the month, keep going. Allow yourself to buy the things you need, but ask yourself if you're buying it to feel better or if it's a necessity. Think about a purchase for a day or two, and then buy it if you really need it.

Once you change your money views, you can find additional debt relief help from a credit counseling service, consolidate credit cards, or create your own credit card debt relief system to help you get out of debt and stay there.

Dealing with debt

Mortgages, credit cards, student loans, personal loans, and auto loans are common types of debts. According to the NY Federal Reserve total household debt as of Q1 2024 was $17.69 trillion. Housing debt totaled $12.82 trillion and non-housing debt was $4.88 trillion.

According to data gathered by from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 8% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

The amount of debt and debt in collections vary by state. For example, in Wyoming, 24% have any kind of debt in collections and the median debt in collections is $2680. Medical debt is common and 17% have that in collections. The median medical debt in collections is $1515.

To maintain an excellent credit score it is vital to make timely payments. However, there are many circumstances that lead to late payments or debt in collections. The good news is that there are a lot of ways to deal with debt including debt consolidation and debt relief solutions.