I get a lot of emails and messages from people that are struggling with massive levels of debt. It freaking sucks. Back when I first started this site, I really didn't have an answer for any of them other than “hang in there!”.
As I get closer and closer to the two year mark for M$M, I've learned a ton about who my readers are and what they need. Some people don't like my strong takes on various financial topics, but I literally don't care – ESPECIALLY if they keep someone from financing something they don't need.
If you want to have an impact on people's lives – you need to have strong convictions. Period.
With that said, you also need empathy for hard situations. Every time I see someone tell a student loan borrower that they are “getting what they deserve”, I cringe a little bit.
Sometimes people make mistakes. Sometimes they just did what they thought they were supposed to do. It shouldn't mean they are just screwed for life.
If you are struggling with massive debt, here are three things to do:
1. Get organized
The majority of people that I've talked to who aren't sure what to do with their various debts are just overwhelmed. When the phone rings constantly with bill collectors on the other side, stressed out is probably an understatement.
Here's the real problem: it's hard to make great decisions under that type of pressure. There are a lot of scammy companies that take full advantage of that.
This should just be taken as a temporary measure, but it may be a good idea to communicate with your creditors and discuss a plan to get in control of your debt or at least make the payments manageable. You need to get organized so you can think clearly and strategize.
However – LOWERING YOUR PAYMENT AMOUNT ISN'T A LONG TERM FIX. It's a temporary tool, and if you can avoid it you absolutely should.
2. Be a student of the game
If you want to handle your debt (especially student loans), you're going to have to research like crazy. No exceptions. You can't afford to sit back and let things happen to you.
There's a slew of forgiveness programs and payment options out there, but rarely is anything simple when it comes to this stuff. If you are dealing with federal student loans, you need to go to the Department of Education's Federal Student Aid website and start looking around.
Also, avoid scams at all costs! The Department of Education is the ONLY entity that can consolidate your student loan debt. Any company who claims they can do it is most likely a scam.
You also need to fully understand your debt. What is your current interest rate(s)? What are the penalties for missed payments? Will your interest rate go up after a certain period of time? Know your debt inside and out so you can kick it's @$$. 🙂
The first question I always try to ask people who contact me about their debt is what kind of interest rate they have. If I had to guess, it's probably 70% of the time that they aren't sure.
Do. Your. Homework.
Have a stable career? Do yourself a favor and research a lower student loan interest rate with the only refinance comparison tool I recommend on the site. It's 100% safe and free!
3. Join a community
Whether it's a site like this one or any number or personal finance websites out there, you should actively read and participate in something. I can guarantee you that you aren't alone in struggling with debt. I have the emails to prove it.
Surrounding yourself with positive people that care about your situation is vital. Putting myself around mentors was the only reason I paid off my student loans so quickly, and it's why I've had some business success early on too.
I truly believe that if you surround yourself with other people who are battling debt, you'll be more likely to succeed over the long term.
*BONUS* – Start a side hustle!
You didn't think I'd let you finish this post without telling you to start making extra money, did you?
I legitimately care about every one of my readers going through a tough time with debt. However, it is hard not to roll my eyes when I see someone tell me they don't have time to try and make more money. Make more time.
Paying off debt isn't easy. The world does not give a crap how hard it is for you to make payments. It's just the reality of the situation. With that said, you can always control how hard you work or how little you sleep.
You don't have to be a full-blown entrepreneur to make some extra money on the side or take a second job.