Are Your Debt-Resolution Plans Realistic?

debt-resolution-plan

If you are trying to get out of a debt hole, you need to make sure that your plans are realistic. Many people try to get out of debt using their highly unrealistic plans. In fact, many of these are not plans at all. They are technically just wishes. There is no realistic set of actions contained in them. If truth be told, many people just wish that debts will go away. Guess what? These will only get worse.

So instead of staying in “wishful thinking” mode, you should start putting in the time to analyze your resolution plans and see if they are realistic. Use the following questions to help you gauge how realistic your debt resolution plans are. These questions really get to the heart of the matter and the core of your plans. Even if the answer is negative, that is still good news because it will still give you an idea on what you need to fix and modify.

How much can you really pay per month?

This might seem like a very basic question but many people are clueless on how much they can really pay every month. Many people think that they can only pay a small amount. It is because they have so many expenses and “needs”. The truth is that they don’t really need that much to stay alive. Sure, you need to pay for rent, food and car fuel but everything else is pretty much you can do without. So you really have to make sure that if you have very low payment levels in mind, make sure that those are realistic.

At the other end of the spectrum are people who think that they can pay a huge amount of their income every month. This could also be as unrealistic as the low amount. They fail to factor in hidden things that cost their money every month. You have to be very sensible on how much you can really pay every month.

Is the timeline realistic given your circumstances?

The bottom line is that most plans are realistic. It is just that they need more time. So you have to make sure that the deadlines you set for yourself are enough to accomplish the goals that you have established. If not, you need to adjust them. How can you realistically expect to pay off your debt in a month? It can take years to wipe away your debt. If you set a short repayment schedule you will be discouraged when you begin to not meet your goals.

Have you made provisions for emergencies?

This is the clincher. For many people who stick to fixed debt payment scheme where they set up a certain percentage of their income, this is what really throws them off because they don’t factor in contingencies. In other words, they don’t plan for financial emergencies. Always give yourself some padding for emergencies. Some things pop up unexpectedly.

Edwin C

Edwin is a marketer, social media influencer and head writer here at Money Debate. He manages a large network of high quality finance blogs and social media accounts. You can connect with him via email here.

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