When you have a family that you love and care for, you dread to think about what you would do when money was involved and causing rifts. Family debt can cause a lot of stress on everyone.
We take extra care not to mix money and friends yet we do not do the same for our families. We think that mixing family members with money is just what you have to do in life. To some degree, this is true and cannot be avoided. And when debt does begin to pile up what do you do to tackle the problems that face you?
Unlike a friend who will have to find a way through on their own, you can help your family to get into the black from the red. This requires a treatment list that is long and none of the solutions will be palatable. Here is a list of some things you can do right now to help with family debt.
Helping Grandma Refinance
Does your grandma have debt issues? Maybe she has lost her husband and the costs are piling up now that he is not here. His pension may not have gone to her and he may not have left her a lot of savings. So, family debt can begin to pile up and cause him to potentially take drastic actions. But wait a minute, she has options!
- Refinancing her home is the number one option. She can take out a lien on her house which will act as a guarantee to all her debts. This can mean that the family debt can be shrunk in monthly payments and the length of time, in order to pay back the full amount, is increased. This can result in family debt becoming more manageable and gives your grandma more time to figure out where she will get the money from to make good on any debts.
- ISA restructuring. Most long-term ISA accounts will have strings attached. Some of the plans will have clauses that mean you can only take out the money in portions. Some will mean you can only take out the money in a lump sum. Some will not allow you to take out any money until you have met their minimum year’s amount. You can restructure your ISA and change these details to have early access to the money and help you to pay any bills or debts. The interest rate will be affected so be careful before making an important decision.
The two main options of older people to gain control of their family debt through their assets are ISA early access or putting a lien on their house. Both options should be considered carefully as they have long-term implications.
Family Spending Out of Control
The number one reason for family debt to be spiraling out of control is the weekly or monthly spending. Whether you are buying clothes, food, paying for luxuries or just not watching your cash flow, family debt can mount up and up until you lose control. So you need to do a few things to gain control and bring your debt monster to heel.
- Grocery shopping budgeting is extremely important. You could be spending far too much on your shopping and over the course of a month, you will accumulate hundreds of dollars of more debt.
- You may need to cancel or minimalize holidays if that is something your family normally does. It may be crucial that you start being more conservative and in accordance with your new circumstances. Holidays can cost families thousands of dollars, so just think about how much money you could be saving by simply taking a staycation or minimalizing your spending on them..
- You can also try to save a lot of money by just not using as much energy at home. If you can limit your family’s shower time and try to train everyone in the household to consciously use less water and hurry up while they are in there, you could again save more and more money each week.
Educating Yourself on Laws
Did you know that some people simply cannot be made to pay some fees? That is because with the trinity debt management you not only get to discharge your debt, but you are legally protected from something that would make your debt rise higher.
Take a look at the program and you will find certain laws that simply need to be activated by a citizen. Their status will change and they will become less and less wrapped by the federal government. You would not be subject to certain court fees and your business would not be subject to certain tax laws.
This is excellent because it simply begins by reclaiming your birth certificate and no longer being so close with the federal government. This occurs when you reclaim a portion of a certain registered birth scheme which then gives you some money in return.
You are also not subject to certain bankruptcy laws which makes you more versatile and stronger against laws that would otherwise mean your credit rating decreases. This is a plea to all families that are stressed and underneath debt, you can solve so many issues simply by educating yourself on certain laws.
If things are getting really bad, you could always move into a more affordable space. Not only can you pay off your debts sooner by selling your home but you can regain your independence back too. You are no longer having to limit your spending as much because you have paid off all or a large portion of your family debt.
Moving out of your home does not have to be permanent either. You can rent out a room in your home and have a lodger living with you. You do not need to rent your entire home out while you live somewhere smaller, because lodgers will usually pay more to not live with other roommates.
You also have more control over the contract, as it is your own home and you are currently living inside it too. Therefore you can set the rules and this can mean less bother and headaches from unruly renters. But you need to have a plan because you should be aiming to get back on your feet and into the property market again.
A Working Family Can Go Far
Rather than just the parents working, could the children get jobs too? It is highly advisable that at least one of the parents gets a second job but that will require the family to be willing to make other sacrifices and not just bear the burden onto one person.
If all the children and the adults are working, you will have more income coming into your household. This can then mean that you begin to pay off your family debt far quicker. Not only are you doing everything you can to save money at home, but you are bringing more money in, too. This can result in a double debt relief effect and cut your family debt down by substantial amounts each month.
Can the kids get jobs from friends you know? Can they work summer jobs such as on farms, picking fruit, or cutting lawns around the neighborhood? Can the adults work on the weekend as well as weekdays? These are all things you should work towards and see how fast you can pay off your family debt.
Final Thoughts on Family Debt
Family debt is very stressful because the entire household feels the pinch. It can mean you need to find new ways of saving and budgeting every week for all the things you buy. However, once you get into the mindset and rhythm things become easier for everyone. What have you done to eliminate or east the burden of your family debt?