What is Debt?
A debt is an amount owed to another person, business, financial institution, or other entity, for funds, goods, or services borrowed. Debt can take on various forms such as bonds, loans, or other statements of repayment terms and/or interest requirements. These varying forms represent intent to pay back what has been borrowed.
Debt isn’t necessarily good or bad. Debt only becomes a problem when you find yourself unable, or struggling, to pay back what you have borrowed. Oftentimes, people incur debt when they purchase things they cannot afford in the moment – such as a car, house, etc.
However, there are other individuals who simply spend outside their means and are left scrambling when their monthly statement arrives. Thankfully, there is help out there for people struggling to make ends meet.
How do I manage my debt?
Admitting you’re in debt is a difficult thing to do – and admitting you need help is even harder. The key to managing and getting out of debt is patience – financial freedom doesn’t happen overnight. It’s common to feel overwhelmed when dealing with debt. But rest assured that no situation is hopeless. There are a variety of different ways to manage your debt that will be explained in this section.