Whether it’s a structured settlement, insurance annuity, or lottery winnings, selling these types of policies might be just what you need to begin your escape from the black hole of debt. This might seem counter-intuitive; why would you want to get rid of a guaranteed source of income for the foreseeable future if you are already clearly struggling? According to Newser.com, however, a new study from Texas AandM indicates this could be your best option.
While the study does not specifically mention ways in which to cash in on a settlement or annuity, it found that motivation and momentum are powerful factors when it comes to paying off debts. If you can get just one debt balance to reach $0, as reported in Science Daily, the benefits to your overall psyche and commitment to continuing that success are now quantifiable.
“Winning what are known as ‘small victories’ by paying off small debts first can give consumers a real boost in eventually paying off all their debts,” wrote Alexander L. Brown and Joanna N. Lahey, both of Texas AandM University. “The reason is that meeting a small goal provides the motivation to then meet a larger goal.”
Essentially, the study entailed subjects performing tedious tasks. The subjects had more success in completing those tasks when they were broken into smaller increments.
If you’re in debt, it’s a scary proposition to sell any sort of income that you are garnering in perpetuity. By doing so, however, that lump sum of money could potentially pay off one or multiple debts right away.
In total, Americans owe more than $11 trillion in debt.