Receivables Performance Management | 5 Considerations Before Taking on Debt
In this day and age, it’s never been easier to obtain a line of credit. With that line of credit the easiest thing in the world to do is start racking up debt.
The problem with credit cards is that the funds available are basically meaningless to you. You didn’t work 40 hour weeks for that line of credit. It was given to you by a creditor, so you have no skin in the game, so to speak.
Debt can be a real problem for some folks. It doesn’t matter if it’s brought about by credit cards, bank loans, car loans, student loans, payday loans, and every other type of loan under the sun – they can all put a real damper on your life. That’s why we at Receivables Performance Management specialize in helping our clients settle outstanding debts. We also believe in helping those we come into contact with to take back control over their financial futures.
A big part of what Receivables Performance Management does is educate our clients and those who get taken to collections about good money practices that will set them up for financial success in the future, that way they can learn from the experience and live a better, fuller life.
Read on for 5 ways to avoid getting into trouble with debt.
1.) Think About Yourself as a Business
Every time you take on a debt, think of it as overhead that you incur. That means you have to work “x” amount of hours to make y amount of money in order to make sure you don’t go into the red each month. This payment comes back every month until the debt is paid in full, and doesn’t matter if you’re ever in between jobs or lose your ability to make an income. As a business, you want to keep your overhead low, so you can keep your profit margin high.
2.) Think About Your Debt All the Way Down the Line
Before you sign on the dotted line, think about what it’s going to feel like making that monthly payment each and every month. Make sure you know exactly how long it’s going to take for you to pay off the debt. Think about how old you’ll be when it’s paid. All of this will force you to consider the options and help you avoid making rash decisions.
3.) Calculate How Many Hours You Have to Work
Make sure you know exactly how many hours you’ll have to work at your current job to pay off the debt before you sign. Again, it will make you think very seriously about your decision.
4.) Think Even Harder About Your Purchase
Are you taking on debt to make an investment or is it to make some sort of silly purchase? Make sure that, if you’re taking on debt, that it’s to do something that is meaningful to you, or for some type of opportunity or out of an absolute necessity.
5.) Ask Around
It may seem embarrassing, but ask friends and family about what you’re considering. You’ll get really good advice, because, as we all know, most people are excellent at giving advice about someone else’s life. Just make sure that you’re good about taking advice.
We hope some of this helps. Receivables Performance Management believes just as much in financial education as we believe in providing stellar debt collection services. Contact us today if you have an unresolved debt that you’re tired of stressing about.